Following discussions here and in the other place, the Government have tabled these amendments to remove Scotland from the scope of the provisions concerning the right to use deep-level land. Noble Lords will be aware that, as a result of the Smith commission’s recommendations and the Command Paper that has been published, it is planned that responsibility for mineral access rights for underground onshore extraction of oil and gas will be devolved to the Scottish Parliament in the next Parliament.

These amendments ensure that the provisions in the Infrastructure Bill do not change the current system that applies for granting access rights in Scotland. The Scottish Government and Scottish Parliament already have substantial control of onshore oil, gas and geothermal activities through their own existing planning procedures and environmental regulations, which are devolved. I hope that these amendments will be welcomed.

Motion agreed.

That this House do agree with the Commons in their Amendment 20, do propose Amendment 20B as an amendment thereto, and do propose Amendment 20C as a consequential amendment to the Bill.

9 Feb 2015 : Column 1059

(3) The Secretary of State must lay a copy of any such report before Parliament.

(4) In this section—

“CCA 2008” means the Climate Change Act 2008;

“petroleum got through onshore activity” means petroleum got from the strata in which it exists in its natural condition by activity carried out on land in England and Wales (excluding land covered by the sea or any tidal waters);

“petroleum” has the same meaning as in Part 1 of the Petroleum Act 1998 (see section 1 of that Act);

“reporting period” means—

(a) the period ending with 1 April 2016, and

(b) each subsequent period of 5 years.”

5.15 pm

The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma) (Con): My Lords, I beg to move that this House agrees with the House of Commons in its Amendment 20, as well as with Amendments 32 and 38. I shall also speak to the subsequent Amendments 20B and 20C, which the Government have tabled in this group. I restate this Government’s commitment to reducing carbon emissions by 80% by 2050. To meet our challenging climate targets we will need significant quantities of renewables, nuclear and gas in our energy mix, and we are committed to listening to the experts and their advice on how to reach those targets. The Committee on Climate Change said that for flexible power supply, the UK will,

“continue to use considerable, albeit declining, amounts of gas well into the 2030s”,

which will leave,

“a considerable gap between production of North Sea gas and our total demand”.

The committee argues that this demand,

“can either be met through imports or UK production of shale gas”,

and concludes that,

“if anything using well-regulated UK shale gas to fill this gap could lead to lower overall lifecycle greenhouse gas emissions than continuing to import LNG. It would also increase the proportion of energy produced within the UK, improving our energy sovereignty”.

Notwithstanding this, concerns have been raised in both this House and the other place about how the UK’s shale industry will affect our carbon budgets. We therefore tabled amendments in the other place that

9 Feb 2015 : Column 1060

will place a duty on the Secretary of State to seek advice from the Committee on Climate Change as to the impact of petroleum produced onshore in England and Wales on our ability to meet the UK’s overall climate change objectives over time. The Secretary of State must consider the advice of the Committee on Climate Change and report on his conclusions at least every five years.

The Government now seek to further strengthen this commitment by specifying that if the Committee on Climate Change advises that shale gas may adversely impact climate change objectives, the Secretary of State must either make regulations providing that the right of use for petroleum and deep geothermal exploitation will no longer be available for future projects or report to Parliament on the reasons for not doing so. Amendment 20B and the consequential Amendment 20C seek to address this commitment. By introducing these amendments we are making it absolutely clear that shale development will remain compatible with our goal to cut greenhouse gas emissions.

Lord Teverson: My Lords, I welcome these amendments and very much welcome what my noble friend just said. I do not point at my noble friend in saying this, but I am always disappointed, given the truism about gas being the future, that we have not made more effort to make sure that, in the short term, gas is substituted for coal and that we have a far more rigorous gas industry than we have at the moment. That was the route forward, but we have been unable to put it to bed during the passage of the Energy Bill and now of the Infrastructure Bill. I hope that it is something that can at least be given greater attention after the election. However, I welcome these new clauses.

Lord Tunnicliffe (Lab): My Lords, the government amendments in this group touch on the role of the Committee on Climate Change in advising on the impact which combustion and fugitive emissions from petroleum have on the carbon budget. I understand that this was introduced in the other place as a result of a Lib Dem initiative, and we are fully supportive. We have always said that, if fracking is to take place, we would need the appropriate framework for regulation and need to consider a wider range of issues on which it will have an impact, including climate change. The Climate Change Act 2008, which was introduced by the then Labour Government, was an important piece of legislation that subsequently established the Committee on Climate Change. We therefore support the Committee’s role in advising the Government.

Lord Teverson: Before the noble Lord, Lord Tunnicliffe, sits down, can I just point out one thing that I want to get off my chest? The Climate Change Act was a great thing that the Labour Government did, but among the amendments that they did not allow was one about excluding traded EU ETS certificates from the carbon budget. That means that the power sector is still largely excluded from the Climate Change Act and carbon budgets. It is a big hole in the system and it is regrettable that those changes were never made.

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Baroness Verma: I am grateful to all noble Lords for their support for these amendments. I think that all noble Lords will agree that it makes great sense to ensure that we have the informed advice of the climate change committee.

Motion agreed.

That this House do disagree with the Commons in their Amendment 21 but do propose Amendments 21B, 21C and 21D in lieu.

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(b) is otherwise satisfied that it is appropriate to issue the consent.

(4) The existence of a document of the kind mentioned in column 2 of the table in this section is sufficient for the Secretary of State to be satisfied that the condition to which that document relates is met.

(5) But the absence of such a document does not prevent the Secretary of State from being satisfied that that condition is met.

9 Feb 2015 : Column 1063

(6) The conditions mentioned in subsection (3)(a)(ii) are—

(a) that appropriate arrangements have been made for the publication of the results of the monitoring referred to in condition 4 in the table;

(b) that a scheme is in place to provide financial or other benefit for the local area.

(7) A hydraulic fracturing consent may be issued subject to any conditions which the Secretary of State thinks appropriate.

(8) A breach of such a condition is to be treated as if it were a breach of a condition of a well consent.

4B Section 4A: supplementary provision

(1) “Associated hydraulic fracturing” means hydraulic fracturing of shale or strata encased in shale which—

(a) is carried out in connection with the use of the relevant well to search or bore for or get petroleum, and

(b) involves, or is expected to involve, the injection of—

(i) more than 1,000 cubic metres of fluid at each stage, or expected stage, of the hydraulic fracturing, or

(ii) more than 10,000 cubic metres of fluid in total.

(2) For the purposes of deciding the depth at which associated hydraulic fracturing is taking place in land—

(a) the depth of a point in land below surface level is the distance between that point and the surface of the land vertically above that point; and

(b) in determining what is the surface of the land, any building or other structure on the land, and any water covering the land, must be ignored.

(3) Subsections (1) and (2) apply for the purposes of section 4A and this section.

(4) The Secretary of State must, by regulations made by statutory instrument, specify—

(a) the descriptions of areas which are “protected groundwater source areas”, and

(b) the descriptions of areas which are “other protected areas”, for the purposes of section 4A.

(5) A statutory instrument which contains regulations under subsection (4) may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.

(6) The Secretary of State must lay a draft of the first such regulations before each House of Parliament on or before 31 July 2015.

(7) The Secretary of State must consult—

(a) the Environment Agency before making any regulations under subsection (4)(a) in relation to England;

(b) the Natural Resources Body for Wales before making any regulations under subsection (4)(a) in relation to Wales.

(8) These expressions have the meanings given—

“development order” has the meaning given in section 59 of the Town and Country Planning Act 1990;

“environmental permit” means a permit granted under regulation 13 of the Environmental Permitting (England and Wales) Regulations 2010;

“hydraulic fracturing consent” has the meaning given in subsection (1)(b);

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“licensee” means the holder of the onshore licence for England or Wales;

“local planning authority” means—

(a) the planning authority to which the application for the relevant planning permission was made (unless the Secretary of State or Welsh Ministers are responsible for determining the application), or

(b) the Secretary of State or Welsh Ministers (if responsible for determining the application);

“onshore licence for England or Wales” means a licence granted under section 3 which authorises a person to search or bore for or get petroleum in those parts of the landward area (within the meaning of the Petroleum Licensing (Exploration and Production) (Landward Areas) Regulations 2014) that are in England or Wales or are beneath waters (other than waters adjacent to Scotland);

“relevant environmental regulator” means—

(a) the Environment Agency, if the relevant well is situated in England, or

(b) the Natural Resources Body for Wales, if the relevant well is situated in Wales;

“relevant planning permission” means planning permission to be granted, or granted, in respect of development which includes the relevant well;

“relevant undertaker” means the water undertaker or sewerage undertaker in whose area of appointment the relevant well is located;

“relevant well” means the well to which a well consent relates; “well consent” means a consent in writing of the Secretary of State to the commencement of drilling of a well.

(9) The power of the Secretary of State to make regulations under section 4 includes power to make such amendments of the definition of “onshore licence for England or Wales” in this section as the Secretary of State considers appropriate in consequence of any other exercise of the power under section 4.

(10) The Secretary of State may, by regulations made by statutory instrument—

(a) make such amendments of column 2 of the table in section 4A as the Secretary of State considers appropriate, and

(b) make such other amendments of section 4A or this section as the Secretary of State considers appropriate in consequence of provision made under paragraph (a).

(11) A statutory instrument which contains regulations under subsection (10) may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.””

Baroness Verma: My Lords, I shall speak also to the other amendments in this group.

There is a clear and pressing need to ensure that this legislation is absolutely right. Shale gas is an exciting new energy resource for the UK, with the potential to provide greater energy security, growth and jobs, alongside playing an important role in the transition to a low-carbon economy. Unlocking the shale industry is too big an opportunity to pass up. We all agree that it must be done safely and sustainably, but we cannot throw away the opportunity to create thousands of jobs and economic growth for communities across Britain.

The Government’s position comes from careful consultation of relevant experts and draws on many authoritative reports from the US. More specifically, it

9 Feb 2015 : Column 1065

is based on reports by the Royal Society and the Royal Academy of Engineering, and Public Health England, which have considered a wide range of evidence and looked at the UK regulatory system. Their advice has outlined the risks and concluded:

“The health, safety and environmental risks associated with hydraulic fracturing … as a means to extract shale gas can be managed effectively in the UK as long as operational best practices are implemented and enforced”.

Following exhaustive discussions in this House and the other place, we have been considering the implementation and enforcement of operational best practices in the UK, which is why we accepted Amendment 21 during Report stage in the other place. We did so in order to show our acceptance of the intent of the 13 policy elements it sets out, but noble Lords—in particular, those with a legal background—will appreciate that, as currently drafted, the amendment cannot be included in the Bill. Although the courts would attempt to interpret the provisions, Amendment 21 is not viable as law and simply would not work in practice. Amendment 21 as currently drafted would have been wrong to accept, so we have been working hard to ensure that its spirit is maintained.

The government amendments in lieu are designed to ensure that the regulations we seek to introduce deliver the intended outcomes and support the growth of the shale industry while reassuring local communities that this will be done in a safe and responsible manner. They also ensure clarity for all interested parties by proposing clauses that are capable of being interpreted and enforceable.

Regarding the scope of our amendments, they will apply to hydraulic fracturing, which will be defined in UK law. Geothermal operations will be excluded, as the amendments are being taken forward through the petroleum licence, for which there is no geothermal equivalent. Conventional oil and gas well stimulation techniques will also be excluded—something that noble Lords will agree makes perfect sense, as these have been used for decades onshore.

The territorial extent of the amendments will be limited to England and Wales. In other words, Scotland will be excluded from the requirements of the new commitments. Noble Lords will be aware that, as a result of the Smith commission’s recommendations and the Command Paper published, it is planned that in the next Parliament responsibility for mineral access rights for underground onshore extraction of oil and gas will be devolved to the Scottish Parliament.

I now turn to the commitments themselves. First, our amendments mean that the Secretary of State will not issue a well consent, something that is required by an onshore licence for England or Wales, unless it prohibits associated hydraulic fracturing from taking place in land at a depth of less than 1,000 metres. The right-of-use provisions will be left unchanged at 300 metres. In land at a depth of 1,000 metres or more, hydraulic fracturing will not take place if the licensee does not have the Secretary of State’s consent for it to take place—something I will henceforth refer to as a hydraulic fracturing consent. For the hydraulic fracturing consent to be issued, an application for it has to be made by, or on behalf of, the licensee. Where an application is

9 Feb 2015 : Column 1066

made, the Secretary of State will only grant consent if he is satisfied that a number of conditions have been met.

Some of these conditions relate to the planning systems in England and Wales. In particular, the Secretary of State will need to be satisfied that the environmental impact of the development has been taken into account by the relevant planning authority. He will also need to be satisfied that the relevant planning authority has taken into account, where material, the cumulative impact of the development proposed and any other development involving hydraulic fracturing to obtain oil or gas. He must be satisfied that the relevant planning authority has considered whether to impose a restoration condition in relation to the development and that the relevant water companies have been consulted before any planning permission is granted.

Similarly, a well cannot be drilled, and associated hydraulic fracturing cannot take place, within protected areas. The precise definition of protected areas will be decided at a later stage, as our clauses put a duty on the Secretary of State to bring forward secondary legislation to be laid before and approved by a resolution of both this House and the other place no later than the end of July this year. We must be very careful not to put in place restrictions in areas that do not achieve the intended aim of the condition or that go beyond it and needlessly damage the potential development of the shale industry. In order to satisfy himself that the conditions relating to planning have been met, the Secretary of State may rely on notices given by the local planning authority. A notice, which, in practice, means specifically that the process of an environmental impact assessment has to have been carried out, would be sufficient to satisfy the Secretary of State that the environmental impact had been taken into account.

Similarly, notices from the relevant local planning authority confirming that the cumulative effects of permitted developments have been taken into account where material, that it has considered whether to impose a restoration condition, and that local water companies have been consulted before a decision to grant the relevant planning permission is taken, would allow the Secretary of State to be satisfied that the relevant conditions have been met. It would also be sufficient to receive a notice indicating that the area in respect of which the planning permission has been granted does not include any land which is within protected areas, once these have been clearly defined. I note that the absence of these documents does not necessarily prevent the Secretary of State satisfying himself that the conditions have been met. This is to ensure that if, for example, the kind of notice listed is not available, the Secretary of State could grant hydraulic fracturing consent provided he is satisfied that the conditions listed in the clause have been met. I should stress that it is not possible for the Secretary of State to grant hydraulic fracturing consent if these conditions have not been met.

Other conditions that would need to be met concern the environmental permitting regimes in England and Wales. Consent will not be granted unless the level of methane in groundwater has been monitored 12 months before hydraulic fracturing begins. Arrangements have

9 Feb 2015 : Column 1067

also to be made for monitoring emissions of methane into the air for the period of the environmental permit, and for the monitoring results to be published. The substances used, or expected to be used, in associated hydraulic fracturing have to be approved by the relevant environmental regulator.

5.30 pm

In order to satisfy himself that these environmental conditions have been met, the Secretary of State may rely on permits granted by the relevant environmental regulator. These environmental permits must contain conditions requiring compliance with a waste management plan providing for the monitoring of methane in groundwater for a 12-month period prior to hydraulic fracturing, and of methane emissions for the period of the environmental permit. The permit will also need to contain a condition requiring approval of substances used in associated hydraulic fracturing by the environmental regulator. I note that the absence of these permits does not prevent the Secretary of State from satisfying himself that the conditions have been met. Again, this is to ensure that the Secretary of State could be able to grant hydraulic fracturing consent if satisfied that the conditions listed in the clause had been met.

With regard to the environmental permitting regime, hydraulic fracturing consent cannot be granted if operations are to take place within protected groundwater source areas. For the same reasons as outlined above, the precise definition of protected groundwater source areas will be specified in secondary legislation at a later stage. Our clauses put a duty on the Secretary of State to define protected groundwater source areas in secondary legislation to be laid in draft before and approved by a resolution of both Houses by no later than the end of July this year. Once this has happened, the Secretary of State may satisfy himself that this condition has been met through the receipt of a decision document given by the relevant environmental regulator, in connection with an environmental permit stating that hydraulic fracturing will not take place within these areas.

The three final conditions that need to be fulfilled before hydraulic fracturing consent is given concern notification, well inspections and community benefit schemes. On the first, before granting a hydraulic fracturing consent, the Secretary of State will need to be satisfied that the public were given notice of the application for the relevant planning permission. The Secretary of State will look to the relevant planning authority to confirm that the notification requirements in respect of the relevant planning permission have been met. It is not feasible to require separate notifications for each individual resident as there would be no way for the Secretary of State to confirm that an operator had fulfilled this condition. If the Secretary of State were required to satisfy himself of such a condition despite being unable to obtain the evidence that he would need in order to do so, it would leave every hydraulic fracturing consent issued by the Secretary of State wide open to legal challenge by third parties.

On the second condition, appropriate arrangements have to have been made for independent inspections of the integrity of the relevant well. The Secretary of

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State may satisfy himself that this has happened if the Health and Safety Executive provides him with a certificate stating that it has received a well notification and the necessary information about the well, and that the HSE itself has visited the site of the relevant well.

Lastly, a scheme would have to be in place to provide financial or other benefit for the local area before the Secretary of State granted a hydraulic fracturing consent. This puts in legislation the requirement to provide financial or other benefits to the local area. We have already welcomed a package of community benefits that was brought forward by the industry, through which operators will pay £100,000 for each hydraulic fracturing site at exploration and 1% of revenues at production. Operators will publish evidence each year of how these commitments have been met.

We have worked tirelessly over the past week to come up with a set of clauses specific to the shale industry that, in keeping with the spirit of each of the points in Amendment 21, will provide the public with confidence that it is being taken forward in a balanced and responsible way. I hope my explanation of the government amendment in lieu satisfies noble Lords that this has been done. I restate that shale gas is an exciting new energy resource for the UK. It offers huge potential when countries all over the world are looking to greater self-sufficiency. Now is the time to seize, not lose, the opportunity to develop the United Kingdom’s shale industry. I beg to move.

Leave out from “do” to the end and insert “agree with the Commons in their Amendment 21 and do propose Amendment 21F as an amendment thereto”.

21F: Line 21, at end insert “and have consented to the carrying on of the activity”

Baroness Jones of Moulsecoomb (GP): My Lords, I shall try to reintroduce the original Amendment 21 that went through the other place. It was a Labour amendment, supported by the Government. The Minister has said that this government amendment has the spirit of the original Amendment 21 but, to be quite honest, the Government have missed out some detail that is absolutely crucial. I am also quite interested in some of the scientific advice that the Government have taken; some noble Lords may know that in Wales there was a vote last week to pass a fracking moratorium, as there was in Scotland the week before, until the risks could be assessed. It is those risks that I would like to mention today. A scheduling farce has meant that there has been very little time to debate this, and no time for a vote on Report in the Commons.

I feel that the Government are doing a U-turn here. It is not good enough to pass something in one place and then change part of it quite substantially. There are two issues in particular that I want to raise. The first, crucial point is the possibility of fracking near groundwater sources. There is also the issue of trespass under people’s homes. The amendments that went through the other place were already probably not sufficient to protect against all sorts of risks, but at

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least they were there. The amendments submitted by the Government today may overturn even those quite limited protections.

On the issue of fracking within groundwater source protection zones 1 to 3—that is, the areas around aquifers that safeguard our drinking water—we have heard that the Government might possibly redefine those areas, but they have already been defined by the Environment Agency. There is no reason to redefine them when they have been defined for many years. Our drinking water needs protection; I cannot believe that anyone here does not agree with that.

Lord Lawson of Blaby (Con): I hope that the noble Baroness will not forget to inform the House that groundwater, in aquifers, is very close to the ground—that is why it is called that—while the fracking occurs between one mile and a mile and a half deep, and that what she is saying therefore has no merit whatever.

Baroness Jones of Moulsecoomb: I thank the noble Lord for his intervention. Fracking of course risks earth tremors and earthquakes and therefore water could be polluted very easily, so I would argue that his comments have no merit.

Lord Lucas (Con): Could the noble Baroness point me to any scientific research that supports what she is saying?

Baroness Jones of Moulsecoomb: It is very close at hand if the noble Lord would like to look at it. I can give him any number of sources; I do not have them to hand at the moment but I would be delighted to give them to him afterwards. I am sure that Friends of the Earth and so on would be very pleased to send him a briefing on all this, as they have gone into it extensively.

Lord Turnbull (CB): I remind the noble Baroness of what was said in the Committee on Economic Affairs:

“On the evidence we have heard, there should be no risk that seismic activity caused by hydraulic fracturing would be of sufficient magnitude to constitute any risk to people and property”.

Baroness Jones of Moulsecoomb: I thank the noble Lord for that intervention. The noble Lord, Lord Smith, who was then chair of the Environment Agency, reported to that Economic Affairs Committee that,

“groundwater contamination is the biggest environmental risk in the Act”.

The Labour spokesperson in the other place said that it was all or nothing: if the Government did not accept the amendment, including banning fracking near aquifers, the Labour Party would oppose fracking altogether. I look forward to that party reaffirming its opposition today. People might assume that as this is an unelected House, nobody watches what goes on here, but people do watch and they care out there. Fracking is a very controversial issue; people have already voiced their concerns and will continue to do so. A government U-turn on this is unforgiveable.

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The second issue is that of trespass. I think there is a later amendment that deals with this, but it does not go far enough.

Groundwater contamination is one of the key environmental public health risks from fracking and is a huge risk to the well-being of the population. In some parts of the UK, more than 70% of public drinking water comes from groundwater. As for the Government promising to redefine groundwater source areas, that is a secondary legislation issue. The original idea from the Labour amendment was, however, that this should be in the Bill; it should be primary legislation, not secondary.

A leaked letter from the Chancellor had instructions to pull out all the stops to make for an easier life for fracking companies. This is probably not surprising when our Prime Minister has said that we are going “all out for shale”. I can accept that that side of the House is very gung-ho on fracking but I hope for something better on this side. The original Amendment 21 would also give us an opportunity to vote against the issue of trespass within this Bill.

Despite assertions that shale gas is a fantastic new source of energy, it is time for us to consider whether and by how much it would have a lower carbon footprint. It probably would not, if CO2 and methane are included.

Fracking is one of those things that we can go for very hard when we do not know all the risks, but we have to understand that those risks exist. This House has a duty to people outside who know that there are risks. Some 360,000 people voiced their concerns about issues such as trespass. Many people also responded to a consultation on the risks of fracking. There is concern out there that I feel is not well represented in this House and I urge the Government to think again about this amendment.

The Deputy Speaker (Lord Brougham and Vaux) (Con): My Lords, I remind noble Lords that if Amendment 21E is agreed to, I cannot call Amendment 21G by reason of pre-emption.

Lord Turnbull: My Lords, I confess that I am somewhat mystified why we are discussing a fracking moratorium. It was not in the Bill as it left the Lords and the Commons declined to insert an amendment. What is there left for the Lords to consider?

There are two approaches for analysing this issue. The first we might call the appeal to reason. That was the title of the book by the noble Lord, Lord Lawson. What is the logic of the moratorium? It seems to me to be completely incoherent. It is argued, first, that we do not know enough to permit this technique to be deployed in the UK, but the moratorium would prevent drilling under careful restraints of the kind that the Minister has pointed out and it would prevent us advancing our knowledge. In my view, it is the logic of the GM-crop tramplers.

The next argument is that we cannot allow our shale reserves to be exploited as this would be inconsistent with the decarbonisation targets of the Climate Change Act. Setting aside the fact that our exploitation of

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shale is pretty immaterial in a world where China has said that its CO2 emissions will continue to rise until 2030 and India refuses to set any such objective, this proposal ignores the fact that the largest part of gas usage is for heat in our homes and the feedstock for chemicals. That is not going to change for a long time given the slow turnover in our housing stock for several decades.

This morning, I looked at where the various sources of energy came from. At 11 am on a very cold and still day, we were using 46 gigawatts of energy. Of that, 6% came from wind and 43% from gas. This proposal ignores the fact that we need access to gas to provide the back-up when the wind does not blow in precisely these climatic conditions, which are repeated quite often each winter.

5.45 pm

The second approach to analysis is the appeal to authority. Who supports it and who is against it, and to which witness do you attach the greatest credibility? The attempted Commons amendment, which the noble Baroness, Lady Jones, has commended, received only derisory levels of support and was based on the findings of the House of Commons Environmental Audit Committee. The committee identified a number of environmental risks which in its view justified a moratorium—water extraction, wastewater disposal, fugitive methane, land use, noise and so on. We should remember, however, that the House of Lords Select Committee on Economic Affairs went over exactly the same ground but its conclusions were radically different. It saw substantial benefits to the UK and concluded that the environmental risks cited by the Commons committee were either not as serious as represented or could be managed by an effective regulatory framework.

Why do I attach greater weight to the Lords’ findings? It is not just because this is our House, or that I have greater faith in the judgment of the noble Lord, Lord Hollick, than that of Ms Joan Walley, or that the Lords’ findings are consistent with those of the Royal Society and the Royal Academy of Engineering; it is also because I believe that there is a structural flaw in the remit of the Environmental Audit Committee, which is to consider to what extent the policies and programmes of departments contribute to environmental protection and sustainable development.

A decade ago, government documents on energy policy cited four objectives: consistency with our environmental objectives on climate change, enhancing competition, reducing fuel poverty and strengthening energy security. The problem with the EAC and, I would say, the climate change committee, is that they have concentrated on one of these objectives to the detriment of the other three. As a result, I believe that their recommendations are flawed.

I have some misgivings about the heavy apparatus of steps that have to be gone through and the safeguards which the Minister has set out for us, but provided that we operate within a four-pillar and not a one-pillar framework, I think we should support them.

Lord Truscott (Non-Afl): My Lords, I speak in support of the spirit of Amendment 21. As a former Energy Minister, an investor in the hydrocarbon sector

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and a former non-executive director in hydrocarbon companies, I have given a great deal of thought to whether I support the development of fracking in the UK.

Quite apart from the environmental risks in such drilling—and, although the degree of risk can be debated, there is always a risk when drilling for hydrocarbons, particularly given that we live on such a densely populated island—I think we should look at the broader picture. What has been ignored so far is the picture of global demand and supply that we are witnessing. The Chancellor has said that we should try to emulate the success of the United States with shale oil and gas. However, what we are witnessing globally today is a supply glut. The success of shale in the United States has partly contributed to that. Perversely, we are seeing that this glut is pushing down the price of oil and gas across the world—particularly oil—and the impact of that on a number of smaller companies is that they are going to the wall. We are already seeing a decline in shale oil production in the United States and we should not forget that with shale oil we have seen quite a dramatic decline over a couple of years. So there is a dramatic fall-off in investment in the United States in shale, a fall in employment, a number of smaller companies going to the wall and all the majors have now announced that they are cutting back investment in major oil and gas projects. Therefore my fear is that we are entering a period of greater volatility as regards energy prices.

To a certain extent the success of shale in the United States has been quite limited, both as regards scale and duration, and we are now entering a period of quite dangerous volatility with regard to investment. Therefore, although consumers currently benefit from lower energy prices for oil and gas, that may well be short-lived. In addition, with the majors pulling back on major investment and with a number of smaller shale companies going to the wall, once the existing number of companies have cut back on production in the United States, in two to three years’ time we may well see the price of a barrel of oil go back up to $200.

Therefore, if we look at the United States as a model for a number of the companies that are involved in shale—and a lot of the communities that will depend on that local investment—it appears that it is not seen as a wonderful model, so maybe it is not a model we should adopt for the UK. Shale takes a huge amount of investment to develop, and it has its environmental risks. In the UK it will take many years to go through the planning process, yet the success of shale can be relatively short-lived. In the mean time, we will have these huge peaks and troughs in the price of hydrocarbons.

Viscount Ridley (Con): Will the noble Lord agree that if the oil or gas price shoots up, as he says, we should be all the more encouraging towards the shale industry in this country?

Lord Truscott: No, because that would be a short-term benefit. We should look at the long-term planning. That is the difficult thing with shale at the moment: it is destabilising the market for oil and gas, with the majors cutting back quite dramatically. You can have shale production, but it is short term. If, for example,

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you invest in a major field, it can take 10 or 20 years to develop—Kashagan in Kazakhstan, for example—it needs billions of dollars of investment, and takes many years to develop, sometimes decades. Companies have to be able to plan ahead, as that gives medium to long-term relative stability to the oil price. If you are talking about shale, you are talking about a two to three-year timescale for the development of a field, which does not provide the sort of stability we are talking about.

Of course, we should also look at increasing investment in renewables as well. Shale is one thing you can look at, but you can also look at investing more in renewables.

Lord Turnbull: The noble Lord may be confusing two different things: a well, which may have a short life, and a field. I can see that wells might run out quite quickly, but then other wells will be drilled, so that does not mean that the field runs out in the period as he is explaining.

Lord Truscott: What tends to happen is that in the United States, for example, a shale oil rig—a well—may cost $1 million to develop. You then drill in that well for a couple of years, and then you have to invest further in the next well in the same field. A number of shale oil companies in the United States at the moment face not getting the funding to invest in the next well, because it is very cash-flow intense. Therefore if you want energy security, shale oil and gas is not the way to achieve it. It is a very expensive short-term hit, and it adds to the volatility of the price of oil and gas. In a way, the success we are seeing in the United States is already unravelling. I therefore wonder whether it is worth the cost as regards the overall benefit.

We are also seeing the impact on businesses, both large and small, in the hydrocarbon sector. Ask any of the majors at the moment whether they are happy about where they are as regards medium to long-term planning, or go to Saudi Arabia and ask people what they think about the impact of shale oil and gas development in the United States and on the global market. You can say that they are game-playing, but nevertheless, it is destabilising. Is that the way we want to go? Is that a great success story? I am not so sure that when we look back on the development of shale in the United States it will look as successful as we all initially thought it would be. Therefore from that point of view, is what happened in the United States the right way for the United Kingdom to go? I am not so sure.

Lord Skelmersdale (Con): My Lords, before the noble Lord sits down, can he tell me whether he knows of any company of any size, in any part of the world, which invests to not make a profit?

Lord Truscott: That is exactly the reason. The noble Lord may know that that is why some companies are going bust—today Max Petroleum, which develops oil and gas in Kazakhstan, said that it was facing insolvency because it can no longer raise the funds to develop new fields. When the price of oil is under $50 a barrel—and we are already seeing the effect on companies such as BP, which is laying off people in Aberdeen

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because the price of a barrel of oil makes it uneconomic to continue to develop mature fields in the North Sea—we are facing a problem, are we not?

Lord Borwick (Con): My Lords, I welcome this government amendment and thank my noble friend for clarifying some extremely important points. I am particularly pleased that it is now clearer that the clauses apply to hydraulic fracturing, with any ambiguity removed. However, there are some further points that I hope will be addressed in secondary legislation.

We have delayed shale exploration for too long. We have to get going so that we can show the public that there is nothing to fear. Once we start, the public will surely say, “What was all the fuss about?”. It is therefore extremely important that drilling boreholes for groundwater quality monitoring is delinked from the planning process. Permitted development rights under the general permitted development order can be used to install boreholes for monitoring water quality; that is common in the water industry. However, it is different for any development that is subject to environmental impact assessment regulations. Then, any part of the development, including the drilling of boreholes for monitoring water quality, cannot take place until full planning consent is granted. That would apply in the case of any development which includes hydraulic fracturing. It would mean, in practice, that no baseline data could be collected until full planning permission was granted, leading to a minimum of 12 months after planning before hydraulic fracturing would be permitted to take place. That would be a significant and unnecessary delay.

We should therefore allow baseline monitoring during the planning process for shale exploration. That would drastically cut the delay: doing the monitoring, then putting in the planning application, and monitoring while the planning process continues. Even if it is not a positive planning decision for industry, at least some useful data will have been obtained in the mean time during the monitoring process. More baseline data would be very welcome, so delinking from planning is a win-win whether the planning decision is positive or not. Can my noble friend therefore assure me that these concerns are noted in the amendments and will be strongly considered as the secondary legislation is formulated?

The treatment of groundwater protection zones was one of the worst outcomes of the amendments made in the other place. The Environment Agency already effectively prohibits operations in what is known as source protection zone 1, and in the lesser zones 2 and 3 the industry already has to make a convincing case to the Environment Agency. That strikes me as the right balance of regulatory oversight. That could impact on other industries, too. Shale operations take place well over 1,000 metres below any aquifer, whereas a lot more industrial activity from other sectors takes place on the surface, directly on top of the same source protection zones.

Moving away from the current regulatory framework of the Environment Agency regulatory position could have dire consequences for other industries. Furthermore, if a licence has already been purchased, it may be of

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no use whatever. There is no chance of that company receiving its investment back. Every investment is risky—rightly so—but this will make future investment in shale exploration all the more risky than it ought to be. Changing the rules after the licences have been awarded will not increase future licence revenue.

The government amendments mean that a decision on what is groundwater area is referred to secondary legislation. Can my noble friend assure me that those concerns will be taken into consideration as the secondary legislation is formulated?

Viscount Ridley: My Lords, I declare my interests in energy as listed in the register; they include coal, which is of course threatened by shale.

Unlike the noble Lord, Lord Truscott, I think that the people whom we should be concerned about are not those looking for oil in Kazakhstan or the Saudi oil companies but the people who are struggling to pay their heating bills this winter. That is what this is all about: trying to get the cost of gas down. We need gas and, whatever happens, we will continue to need gas, as the Minister said on a previous amendment. We need gas for heating and will continue to need it—84% of British homes are heated by gas. Where there is fuel poverty, it is nearly always associated with electric, rather than gas, heating. We need gas as a chemical feedstock for the chemical industry; we need it to make fertiliser to feed the world.

6 pm

So we have a golden opportunity. We have found one of the biggest gas resources ever, right under an area with high unemployment—the north-west of England—and not far from a concentration of our chemical industry. Some 10% of the Bowland shale gas could give us 50 years’ full supply of the gas consumption in this country. As we have heard, because of the community benefits funds being offered, it would offer great public benefit. It would lower our carbon dioxide output because it is certainly lower than imported gas, some of which comes in the form of liquefied gas, which has a carbon cost associated with it. It is certainly lower than coal in terms of its carbon emissions.

Much of the opposition to shale gas—some of which we have heard today—is based on myths that are popular among the upper middle class in grand rural areas. The myths are also very popular in Russia and are frequently repeated by Vladimir Putin in press conferences, because he does not like the idea of us getting our own cheap gas. We should listen to the words of the US Secretary of Energy, Ernest Moniz, who said a year or two ago,

“I still have not seen any evidence of fracking per se contaminating groundwater”.

He said that after tens of thousands of wells had been drilled and millions of fracking operations had happened in them.

It is clear that the opponents of fracking will do anything to delay and raise the cost to try to kill this industry. In that light, the amendment of the noble Baroness, Lady Worthington, is unnecessary and

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mischievous. It is just trying to put another hurdle in the way of shale gas by insisting that every resident nearby be written to. As has been said, it opens the way to legal challenge on everything. As it is, with all the regulations we have put around shale gas, it still may be touch and go as to whether we have killed the golden goose already. However, it looks as though we have not, yet—there is still an opportunity to have this wonderful, indigenous resource and to lower the cost of gas for people in this country.

We have put in place far greater environmental protection than for other industries. The situation with earthquakes and shale gas is that, if fracking shakes the ground, it has to do so 40,000 times less than the quarrying industry is allowed to do. That is completely mad: they are both earthquakes. I welcome the government amendments in lieu, which would adhere to the principle adopted by the oil and gas industry on environmental practices for many years: that is, the industry since Piper Alpha has always pursued the idea of goal setting rather than box ticking. It has already accepted or adopted many of the practices that are listed in these amendments. Crucially, the amendments also allow flexibility, so that the industry can learn, adapt and evolve as it is going on. That is why it is crucial to leave some flexibility in the Bill with respect to the definition of groundwater areas, protected areas and so on. As we demonstrate the safety of shale gas, we can adjust as we go on.

Finally, on the subject of trespass, I welcome the Green Party’s embrace of an extreme version of private property rights, of the kind normally associated with the libertarian right. However, the party goes too far, because imposing an offence of trespass on something that happens a mile and a half beneath your feet is like imposing an offence of trespass on British Airways for flying over your head. We sorted out that issue in the 1920s and decided that it was not a sensible use of the law of trespass. We should do the same with this.

These are sensible amendments.

Lord Young of Norwood Green (Lab): My Lords, I support the government amendments, because in effect they are in keeping with the spirit of the Commons amendments and ensure a practical application so that shale gas exploration will go ahead.

I will address as briefly as I can some of the assertions —and they were assertions—made by the noble Baroness, Lady Jones of Moulsecoomb. She was invited to give the source of what she alleged and was unable to do so. That is really unfortunate.

Baroness Jones of Moulsecoomb: I am perfectly able to do so, but sadly not at this precise moment. I am more than happy to do so in the future.

Lord Young of Norwood Green: With due respect, I do not think that is good enough. If we are going to enter into a debate in your Lordships’ House in which assertions are made that in essence the exploration of shale gas and fracking is unsafe, it ought to be backed up now with the evidence. The noble Baroness has had the opportunity to do so.

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I try to enter this debate sharing the same concerns as the noble Baroness—concern for the environment and for the benefit to the public as a whole—and I do not take any assertions from the companies that might be involved in it: I go to sources such as Durham University, which is conducting an independent assessment, I look at the House of Lords report. We keep hearing assertions about earth tremors and earthquakes, but I thought we had nailed that in the last debate. There will be continuous seismic monitoring. Operations will stop if there is a tremor of 0.5, and at 0.5, believe me, the earth would not move for anybody in this Chamber, whatever they were doing, so to allege that the Government and this House are somehow colluding with an unsafe practice is totally irresponsible.

Let us remind ourselves that we are still going to be dependent on gas. By 2025, something like 70% of it is likely to be imported. Let us remind ourselves what happens with imported gas. First, it could be fracked elsewhere, where the conditions are not likely to be quite as well protected and monitored as ours are. Then it has to be liquefied, transported and then de-liquified to be put back into its gaseous state. Are we saying that is preferable to using our own resources? I do not understand that analysis and I do not think it is borne out.

Lord Truscott: Of course, not all imported gas has to come as LNG. Some can come directly through the interconnectors with the continent or through pipelines from Norway, for example.

Lord Young of Norwood Green: I thank my noble friend, but a significant amount will still be LNG and I do not think that undermines my point. I know that my noble friend Lord Truscott has lots of experience, but I must admit that I was surprised by his analysis. Even if we are sceptical, it was a British geological survey, after all, which identified 1,300 trillion cubic feet of natural gas. If we take only 10% of that as capable of being extracted, which is a reasonably modest assessment, that is something like 40 years’ supply of the gas that we use—and we are being invited to say that we should not even consider using it.

My noble friend suggested that it was all about the current price of oil and gas. Of course we should take that into account, but as he was invited to say, is he seriously thinking that companies will invest in shale exploration without any prospect of return? I talked to companies recently about this and said, “Aren’t you deterred by the current price?”. They said no, because they do not invest at today’s prices. They are talking about a plan that is likely to take five years. I do hope that the House will support the government amendment.

On protecting groundwater, of course we should be doing that. Again, I have looked at this carefully. Apart from the fact that there has been very little evidence of methane contamination from fracking, we are talking about a six-inch pipe being drilled down. When it goes through the aquifer, which is at approximately 300 to 400 feet, multiple layers of steel and concrete contain the gas on its way to the surface and prevent it escaping into surrounding rock and groundwater.

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What about the myth about the chemicals? We should remind ourselves that 99.95% is just sand and water and that the 0.05% consists only of approved non-hazardous chemicals, one of which is polyacrylamide, which is used for contact lens solution. We would be unlikely to use that chemical for a solution like that if we thought that it was seriously hazardous.

I am just as concerned about the environment and the water supply as the noble Baroness, Lady Jones of Moulsecoomb, but I am also concerned about those who, frankly in my opinion, misapply science and deliberately distort data rather than convey to the public the facts and the independent assessment, which is what this House should be doing. On those grounds, I hope that this House will overwhelmingly support the government amendments.

Lord Tunnicliffe: My Lords, it may be for the convenience of the House if I set out the Labour Party’s position on this group of amendments, because what I hear is a gathering debate on the merits of fracking and I have no intention whatever of referring to that.

The essence of our position is to explore the difference between Amendment 21 and the other amendments in the group and to try to persuade the Government that their amendment may require fine tuning. However, we will not seek to divide the House on our amendment and we will not support the amendment in the name of the noble Baroness, Lady Jones of Moulsecoomb.

On Monday 26 January, the Government accepted a Labour amendment to the Infrastructure Bill to overhaul the regulations for shale gas. This was a huge U-turn by the Government and a big victory for the protection of Britain’s environment. Labour has always said that shale gas extraction cannot go ahead unless there is a system of robust regulation and comprehensive inspection, but David Cameron has repeatedly ignored people’s genuine and legitimate environmental concerns over shale gas. Now, thanks to Labour’s amendment, the Government have been forced to accept that tough protections and proper safeguards must be in place before fracking can go ahead. I must make it clear that we are very pleased about the Government’s U-turn and think that it is in the best interests of the nation and the environment.

On Thursday 5 February, the Government tabled their own redrafted version of the amendment that is before the House today. Our position remains as it has been for three years: namely, that regulatory gaps need to be filled to ensure the right conditions are in place before any drilling to explore or extract unconventional gas is permitted. The Government’s amendment accepts a number of the regulatory safeguards that we proposed, which we welcome. However, it also excludes protections that were agreed to in the other place, most notably on the monitoring of fugitive emissions, notification of residents affected by fracking, and safeguards for protected areas and groundwater source areas. I must make it clear to the House that if the Government’s amendment is passed today, it will be challenged, if necessary, in the other place. Therefore, we will listen to the Minister’s response with great care, and it will be considered with great care by colleagues in the other place.

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While the Government have said that their version of the Labour amendment redrafts, but does not substantially alter, its terms, I have a number of concerns. The original Labour amendment referred to fugitive emissions. The government version limits this to fugitive methane emissions. Does the Minister recognise that there will be other emissions arising from shale extraction, including CO2? Why have they not included this in the scope of their amendment?

The original Labour amendment referred to mandatory environmental impact assessments. The government version refers only to the environmental impact, stopping short of a full EIA. Will the Government explain their rationale for this? What, in the eyes of the Minister, is the practical difference between a full EIA and the requirements of this proposed new clause?

The original Labour amendment referred to no fracking within or under protected areas. The government version refers to that only within protected areas. Does the Minister accept that this could still lead to hydraulic fracturing underneath national parks and other areas?

The original Labour amendment referred to a prohibition on developments inside groundwater protection zones. A definition of groundwater protection zones is already given by the Environment Agency, yet the government version refers to protected groundwater areas and suggests that these should be defined in a future statutory instrument. Why are the Government not using the existing definition?

The original Labour amendment required that residents should be notified individually. This is not required in the government amendment. The Minister has already set out some of the reasons for not accepting this requirement. It seems to me that she should go further in explaining why this requirement cannot be met. I believe that the requirement for individual notification exists in other legislation and that the practicality of the absolute concept which she used in her argument is overcome in other legislation. We certainly want to make sure that residents are fully informed and that there is a high probability of all individuals affected being informed.

I repeat that we will not divide the House on our amendment or support the amendment in the name of the noble Baroness, Lady Jones.

6.15 pm

Lord Teverson: My Lords, I, too, will not make a Second Reading speech, as that stage took place last year. I very much welcome the Opposition’s amendment that was tabled in the House of Commons and the fact that the Government have brought back a version of it that is legally sound. In practical terms, I do not think that it adds a great deal to the environmental protections that we already have and which I consider are strong enough. However, it is good to clarify those and to make sure that the Bill has a more balanced approach to fracking.

However, I thank my noble friend the Minister for having excluded geothermal energy from the amendment, because the issues around that are quite different from those around hydrocarbon fracking and it is appropriate

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that these amendments do not deal with that particular sector. That is important because at last, after much effort by many people, that industry is starting to show dividends. Geothermal heat, which is relatively low-level in terms of ground exploration, is starting up under the renewable heat incentive. We have two planning permissions in the south-west for potential geothermal electricity generation. It would be tragic if that process stalled after the 20 years or more that a number of us have campaigned to make this very practical renewable energy come through and contribute to the UK’s energy. Clearly, certain regimes will have to apply to that process as well. It is excellent that the change on trespass has allowed that industry to move ahead as that was a major barrier. Therefore, I very much welcome these amendments and hope that the House will not divide on the issue and will decide unanimously to move forward quickly so that both industries can move ahead.

Lord Framlingham (Con): My Lords, I would like to say a few words about the relationship between fracking and our ancient woodlands. Sadly, I fear that it is not really appreciated by everyone responsible for planning and building projects of all kinds just how precious our ancient woodlands are. Individual trees, if lost, can be replaced. It is true that there is a huge loss to its surroundings because it takes many years to replace a mature tree, but it can in time be replaced, as can avenues and shelter belts, however much they are missed initially. Indeed, some might argue that they are better off being replaced when they get to a certain stage.

Similarly, our forests are planted for their timber—technically a crop, albeit a long-term one. While they provide an excellent contribution to the environment over a period of years provided the right species are planted, they are routinely felled for timber and replanted.

Our ancient woodlands are centuries old. Thankfully, they have survived, largely by chance. They are precious in a unique way and are quite simply irreplaceable. It is essential that they are given very special treatment, which recognises their importance, the contribution they make to our environment, and the truth that once they have been destroyed, however clever we are, they can never be replaced.

Whatever the pros and cons on the subject of fracking, the simple existence of our ancient woodlands need not be a barrier, provided the companies concerned understand their importance and the public concern for them. I quote the Woodland Trust:

“While we believe that, as long as the geological fracturing activity associated with fracking takes place at great depths underground it is very unlikely to have a direct impact on any ancient woodland located above the fracturing sites, we do have concerns about the potential significant impacts resulting from the construction and operation of the drilling wells necessary to enable fracking to take place, and the associated infrastructure that may be put in place to access and transport shale gas/oil. We would therefore like to ensure that areas of ancient woodland are specifically protected so that licences may never be issued for fracking within or adjacent to these highly precious habitats”.

The Minister said that the protected areas have not yet been decided upon. I hope that she will think very carefully about our ancient woodlands. I urge her to

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indicate in her response, if she can, in the clearest possible terms that the Government accept that our ancient woodlands need very specific protection.

The Earl of Caithness: My Lords, I agree with the noble Lord, Lord Teverson, that these amendments do not do very much for the Bill. All these points were going to be covered anyway. I do not think that the process over the past two weeks has done politicians any good at all. It was a hurried amendment in the Commons and the Government, under Liberal pressure, gave way. We now have a cobbled together lot of amendments which did not give the other case a decent chance for discussion. If anybody reads last Monday’s Commons Hansard, it is not an impressive debate. We have not had a sensible opportunity here, although the whole framework of what we are discussing has been discussed ad nauseam in this House.

I would like to ask my noble friend, particularly about item 6 in column 1 regarding what will take place in other protected areas, how many miles of coal-mine tunnel are under protected areas in national parks and areas of outstanding natural beauty? Of course, we must remember that these would not have been allowed under this amendment: the fracking pipeline is only about 6 to 9 inches, whereas a coal-mine tunnel is considerably more.

My noble friend Lord Framlingham has just mentioned ancient woodland. Will marine nature reserves will be classified as protected areas? How many more restrictions will there be on the industry? My noble friend the Minister was absolutely right when she said that health and safety risks can be managed with best practices. We need to show those best practices for the rest of Europe to follow.

Returning to point 6, is this a precedent for future development? If you are not allowed to drill a 6 to 9-inch pipeline a thousand feet down, presumably the Government will not build HS2 which will go smack through the middle of the Chilterns, an area of outstanding natural beauty. There will be 11 kilometres of tunnels there. It will do considerably more damage than any whipstocking under an AONB from a small well. Presumably we will not have any more development. The Liberal party has closed the door on development in national parks and closed the door on the opportunity of growth. I think that a lot of people will use item 6 as a precedent in order to stop any future development at all.

Lord Berkeley: My Lords, I follow the comments of the noble Lord, Lord Teverson, about geothermal plants. People may have read an article in the Timeslast week on 2 February about the Eden project, which is trying to develop the geothermal plant mentioned by the noble Lord, drilling several miles underground. It says in the article—it is quite surprising to me—that the water that will come out will eventually be 180 degrees centigrade, which is well above boiling point. That is wonderful. It would heat 4,000 homes and all the biomes of the Eden project. I hope that this geothermal drilling—which is purely water based, I think; there are no chemicals or anything else—will not be caught by these various amendments. To quote Michael Feliks, chairman of the Renewable Energy Association’s geothermal group:

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“It would be a shame if geothermal energy ended up as collateral damage in a debate about shale gas fracking.”

It is a completely different thing. It is drilling, and it should be allowed under the normal planning procedures rather than coming into this Bill at all.

Baroness Verma: My Lords, I am extremely grateful to all noble Lords for their contributions, but particularly to noble Lords who have supported the government amendments in lieu of the amendments that were made in another place.

A number of questions were raised. I want to make sure that I respond to all of them, but there will be one or two questions that I cannot commit to answering now and on which I will have to write to noble Lords, such as the question posed by my noble friend Lord Caithness about the number of miles of tunnels going underground. I do not think that information is at hand, unless of course the noble Baroness, Lady Jones, has the answer.

I reassure the noble Baroness, Lady Jones, that our regulatory regime is robust. It will ensure that no hydraulic fracturing will be permitted where groundwater and drinking water supplies can be affected. We had a protracted debate not that long ago in which we made it very clear that this Government take very seriously that operations will take place only if all of the environmental impact assessments are met. I had hoped that I had laid out today very clearly in my detailed speaking notes our response to what the other House came up with on Report. We have bettered the amendments that the other place made, so that they will be able to stand up to legal challenge and to ensure that the safeguards that she and other noble Lords, such as the noble Lord, Lord Truscott, have asked for can actually be delivered.

It would be wrong to return to the detail of a debate that has been well practised in this Chamber. The industry is already voluntarily doing a lot of what was asked in the amendments put by the Opposition. I am pleased with the response from my noble friends about what we have taken on board. It is never about a U-turn for a Government, it is about listening carefully and then making sure legislation works. If the noble Lord, Lord Tunnicliffe, wants to make a political point out of it, that is entirely up to the noble Lord. I would say, however, that it is really important that responsible and sensible Governments look very closely at legislation and then respond. I think that the general consensus in the House has been that we have listened, responded and returned with a much better set of amendments, which answer exactly what noble Lords opposite and their colleagues down the corridor have asked for.

6.30 pm

The noble Baroness, Lady Jones, asked what policies were in place for protecting groundwater. The Environment Agency does not allow drilling and associated fracking for shale gas in source protection zone 1 areas. This ensures that a high level of protection is accorded to drinking water sources. The amendment provides for protected groundwater source areas to be defined in regulations by the end of

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July. I made that point clear in my opening remarks. Perhaps the noble Baroness missed that point as I was speaking.

The noble Lord, Lord Truscott, went into a long debate about global oil prices. As with all things, particularly in this sector, we do not look for what is happening today. As with all industry investment, we have to look for what will come up in the next five or 10 years. Had the Opposition considered the fact that 20% of our power was going to go offline by 2020, we would perhaps be looking at a different mix of energy. However, today we need a diverse mix. Shale is not the panacea or the golden or silver bullet, but it has the potential to be part of that mix.

We as a Government have also been precise in saying that we need the renewable sector to grow. I am pleased to say that in just under five years we have seen real confidence come to the UK in investment in the renewables sector, which has grown rapidly, with growth in jobs and local economies.

My noble friend Lord Borwick asked about de-linking the drilling of groundwater holes from the planning process. I can confirm that we are actively considering whether the drilling of boreholes for monitoring purposes should be classified as permitted development. We consider this to be an important matter to address, and look forward to that happening in the next Parliament. I should like to commit to delivering on our promise but we need more time to work out the details of exactly what will be in secondary legislation. I know that my noble friend would want that legislation to be absolutely right in its wording, and to demonstrate yet again that we have the right protections in place. I know that he would agree. My noble friend asked about the protections accorded to groundwater source protection zones. I reconfirm that the Environment Agency does not permit activities where there is a significant risk that pollution of groundwater will occur, including in source protection zone 1 areas. The precise definition will be laid out in secondary legislation. I hope that that will happen soon in the next Parliament.

I have made my political points to the noble Lord, Lord Tunnicliffe, and will put them to one side. He also asked whether the Government will require environmental impact assessments. A note from the local planning authority would be sufficient for the Secretary of State to satisfy himself that this condition has been met. This would state that the environmental information had been taken into account, which, in practice, would mean specifically that the process of environmental impact assessment would have had to have been carried out. The noble Lord also asked about other emissions in addition to methane. I undertake to write to him on that issue. I was asked whether there would be any exemptions for sensitive areas. Again, this will very much be in the secondary legislation, which, by the end of July, will state which areas will be protected.

My noble friend Lord Framlingham asked about planning permission in ancient woodland. Planning permission should be refused for development resulting in the loss or deterioration of irreplaceable habitats, a definition that includes ancient woodlands, and aged

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or veteran trees found outside ancient woodland—unless the need for and benefits of the development in that location clearly outweigh the loss. My noble friend can be reassured that it will be only under severe circumstances that we would press to do anything where ancient woodland is there.

My noble friend Lord Caithness asked about marine nature reserves. The term “nature reserves” can, depending on the context, be applied to a variety of sites, including marine nature reserves and those with an international designation for their biodiversity. Again, “nature reserves” encapsulates a range of sites of special scientific interest. National nature reserves and marine nature reserves can come under the term.

The debate has been informative and I am pleased that the noble Lord on the Front Bench opposite made it clear in his opening remarks that the Opposition were not going to press on this issue. As regards Amendment 21G, he referred to separate notifications for individual residents but there would be no way in which the Secretary of State would be able to confirm that an operator had fulfilled this condition, as I said in my opening remarks. If the Secretary of State were required to satisfy himself of such a condition, despite being unable to obtain the evidence, it would leave every hydraulic fracturing consent issued by the Secretary of State wide open to legal challenge by third parties. Such a requirement would not, therefore, be a practical addition to the legislation.

More broadly, we wish this to be seen as a package that is informative to the community. I therefore hope that I have been able to satisfy noble Lords and that they will support the government amendments.

Baroness Jones of Moulsecoomb: My Lords, I thank everyone who took part in the debate, even those who did not agree with me. There were valuable points of clarification from the Minister—for example, the fact that water companies will be consulted is crucial because fracking takes a huge amount of water. That is important in these days of a sometimes erratic water supply.

I said at the beginning that my main point of concern related to the groundwater source protection zones 1 to 3. The Government are not taking that issue seriously enough. Those zones were protected in the original Amendment 21 and I see no reason to remove them and include them in secondary legislation. I said that in my speech but perhaps the Minister missed it. Additionally, Labour has flip-flopped badly on this, and I cannot help but feel that it does not understand how important this issue is. If the Government are actually going to listen to the Environment Agency on many of these issues, why not listen to it on those protection zones and take it as accepted that those zones will not be fracked? I do not understand why that is so difficult.

I am also glad that fuel poverty was mentioned. This is increasingly on peoples’ agenda and more people are suffering from it. If we provided help with insulation, that would probably protect and help more people than worrying about only the cost of fuel.

This Government could take a lead from Wales and Scotland—as well as France, Bulgaria, the Netherlands and even New York state—in opposing fracking, focusing

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on renewables and cutting energy waste. That seems a much more profitable way forward. Personally, I am against any fracking, but I equally accept that if it is going to go ahead then the protections have to be secure and strong. That is definitely not what this Bill supplies.

Of course, our water supply is absolutely crucial to our well-being, not only from a health point of view but also for farming and agriculture. It has to be protected. Again, I do not feel this Bill takes it seriously enough. In passing the Bill we are actually letting the Secretary of State decide on protected areas. I am a politician, and many people here perhaps are politicians, but even I would not trust a politician to decide on that. The Environment Agency ought to have the loudest voice here. I would very much like to divide the House on this—obviously—because I care very much about it. However, I am equally positive that it would be a crushing vote so I beg leave to withdraw the amendment.

Amendment to the Motion withdrawn.

Amendment 21G (to Amendment 21B) not moved.

Motion agreed.

9 Feb 2015 : Column 1086

(5) Condition D is met if the second connection is made within the prescribed period after the first connection was made.

(6) “First connection expenses” are any expenses reasonably incurred by a person in providing any electric line or electric plant for the purpose of making the first connection.

(7) It does not matter whether the first connection, or the second connection, is made by an electricity distributor or a person of another description.

The reimbursement powers

2 (1) The “reimbursement powers” are—

(a) the power to demand a reimbursement payment from—

(i) a person requiring the second connection in pursuance of section 16(1), or

(ii) a person who otherwise causes the second connection to be made (including by means of contractual arrangements); and

(b) the power to apply the reimbursement payment in making such payments as may be appropriate towards reimbursing any persons for any payments they were expenses (whether that requirement arose by virtue of paragraph (a) or otherwise).

(2) A “reimbursement payment” is a payment, of such amount as may be reasonable in all the circumstances, in respect of first connection expenses.

Other provision about regulations under this Schedule

3 (1) The Secretary of State must consult the Authority before making regulations under this Schedule.

(2) Regulations under this Schedule may make provision requiring relevant electricity distributors to exercise a reimbursement power (whether in all cases or in cases provided for in the regulations).

(3) Regulations under this Schedule may make provision for the relevant electricity distributor to establish or estimate the amount of first connection expenses—or an amount of any aspect of those expenses—in cases where that distributor is not the person who made the first connection.

(4) Regulations under sub-paragraph (3) may not require any person to supply the relevant electricity distributor with information about any expenses incurred.

(5) Regulations under sub-paragraph (3) may provide for an estimate of an amount of first connection expenses to be calculated by a relevant electricity distributor by reference only to a combination of—

(a) expenses which that distributor would incur if that distributor were making the connection at the time of the estimate, and

(b) changes in prices since the time when the connection was actually made.

Interpretation

4 (1) In this Schedule—

“first connection” has the meaning given in paragraph 1; “first connection expenses” has the meaning given in paragraph 1;

“reimbursement payment” has the meaning given in paragraph 2;

“reimbursement powers” has the meaning given in paragraph 2;

“relevant electricity distributor”, in relation to the exercise of a reimbursement power, means—

(a) in a case where the first connection was made between premises and a distribution system, the electricity distributor that (at the time of the exercise of the power) operates that distribution system;

(b) in a case where the first connection was made between two distribution systems, the electricity distributor that (at the time of the exercise of the power) operates the distribution system into which the first connection has been, or is expected to be, incorporated.

(2) A reference in this Schedule to a payment in respect of first connection expenses includes a reference to such a payment made in pursuance of section 19(1).”

(4) In section 16 (duty to connect on request), in subsection (4), after “23” insert “and Schedule 5B”.

(5) In section 16A (procedure for requiring a connection), in subsection (5)(b)—

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(a) omit “or regulations under section 19(2)”;

(b) after “19(2)” insert “or regulations under Schedule 5B”.

(6) In section 23 (determination of disputes)—

(a) after subsection (1) insert—

“(1ZA) This section also applies to any dispute arising under regulations under Schedule 5B between—

(a) an electricity distributor, and

(b) a person in respect of whom the electricity distributor exercises the reimbursement powers conferred by the regulations.”;

(b) after subsection (1C) insert—

“(1D) No dispute arising under regulations under Schedule 5B may be referred to the Authority after the end of the period of 12 months beginning with the time when the second connection (within the meaning of Schedule 5B) is made.”;

(c) after subsection (2) insert—

“(2A) Where a dispute arising under regulations under Schedule 5B falls to be determined under this section, the Authority may give directions as to the circumstances in which, and the terms on which, an electricity distributor is to make or (as the case may be) to maintain the second connection (within the meaning of Schedule 5B) pending the determination of the dispute.”;

(d) in subsection (4), after “(2)” insert “, (2A)”.”

Baroness Kramer: My Lords, I beg to move that this House agrees with the Commons in their Amendment 22, and will also speak to other amendments in the group, Amendments 30, 39 and 47.

Obtaining a timely and affordable connection to the electricity distribution network is essential for our growth and energy ambitions. It means that customers, including private citizens, renewables generators, house builders and commercial property developers get access to the network either to supply to or to take electricity from the grid when they need to. When seeking a connection, a customer can either use the local monopoly distribution network operator or an independent connection provider. There are around 194 independent connection providers. Over the years, they have gained a growing share of the connections market.

The Government support competition in network connections, as it gives customers greater choice and drives up standards across the board. The Government want to ensure a level playing field for independent connection providers. However, currently the legislation that makes up the second-comer regime potentially places independent connection providers and their customers at a disadvantage. The second-comer regime is based on a power and regulations under the Electricity Act 1989, which allows the recovery of expenses for electricity connections. It is designed to ensure the cost of connecting to the electricity distribution network is shared between different parties.

Specifically, the regime provides that where a customer—the second comer—connects to and benefits from infrastructure paid for by an earlier customer, the second comer can be required to reimburse the earlier party for a proportionate share of the costs. However, independent connection providers are not currently covered by this regime. This reflects the fact that they did not exist in any meaningful number at the time the original legislation was drafted. This means that customers who have their original connection provided by independent connection providers may not be able to recover any costs from the subsequent connecting customers. This in turn can make using an

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independent connection provider less attractive. This is an anomaly and the proposed amendment will update the power in the Electricity Act to ensure that it reflects the current market in connections by allowing a wider range of connection providers to be included in the second-comer regime. This change will support competition in the energy market and a fairer sharing of costs. To implement the change, subsequent secondary legislation will be required to amend or replace the Electricity (Connection Charges) Regulations 2002.

The new clause after Clause 44, Amendment 22, replaces the existing enabling power in Section 19 of the Electricity Act 1989 to confer on the Secretary of State a power to make regulations that will enable customers of independent connection providers to recover a proportion of the cost of a new connection from customers who subsequently connect to the same infrastructure. The power is included in a new Schedule 5B to the Act, which sets out in some detail the matters to be specified in the regulations. In particular, the regulations will allow for electricity distributors to administer reimbursements and, in some cases, to estimate the cost of connections for that purpose. This new clause also amends the power of the Gas and Electricity Markets Authority to determine disputes relating to connections to bring it into line with the updated second-comer provisions. As before, the Secretary of State is required to consult the Gas and Electricity Markets Authority to make regulations under the power.

6.45 pm

The other amendments are consequential to the new clause. Amendment 30 makes provision for the new clause to extend to England, Wales and Scotland, Amendment 39 makes provision for the new clause to come into force on the day appointed by the Secretary of State in regulations, and Amendment 47 amends the Bill’s title. I beg to move that this House agrees with the Commons in its Amendment.

Motion agreed.

That this House do agree with the Commons in their Amendment 23.

Baroness Kramer: My Lords, I beg to move that this House do agree with the Commons in their Amendment 23. In discussing Amendment 23, I will also include Amendments 34, 40 and 48. The Board of Public Works Loan Commissioners, commonly known as the Public Works Loan Board or PWLB, is a statutory body that dates back to the Public Works Loan Act 1875. It comprises 12 loan commissioners appointed by the Crown to administer making loans to local authorities. The commissioners are independent

9 Feb 2015 : Column 1089

of government and unpaid by law. Under Section 4 of the National Loans Act 1968, the PWLB currently has a statutory lending limit of £70 billion. The current level of debt amounts to £64 billion. The original role of the loan commissioners was to approve and issue central government loans to certain categories of permitted borrowers. Under the 1875 Act and subsequent legislation, the commissioners have the power to refuse a loan on the basis of lack of security, and to appoint a secretary who can hold security and to whom the powers of the commissioners can be delegated. The commissioners are also required to issue an annual report to Parliament setting out details of loans advanced by the PWLB.

However, since 2004 decisions on borrowing have been fully devolved to local authorities under the prudential regime. As part of the local authorities’ self-regulated regime, local authorities are free to finance capital projects by borrowing without requiring government consent, provided they can afford to service their debts out of their revenues. This means that the decision-making functions of the PWLB commissioners are essentially obsolete. Local authorities are responsible for their own decisions on whether to borrow and how much. Further, the day-to-day operations of providing loans are now carried out by the Debt Management Office—the DMO—which is an executive agency of HM Treasury.

The commissioners’ functions and powers are delegated to the secretary of the PWLB, who is a civil servant at the DMO. The highly regarded prudential regime means there is no scope nowadays for the commissioners to exercise influence or discretion over lending to local authorities. The Government are therefore considering whether to abolish the Public Works Loan Board while ensuring that permitted borrowers, mainly local authorities, will continue to be able to access central government loans in the same way as now.

The purpose of including the PWLB in Schedule 1 to the Public Bodies Act 2011, which is what these amendments achieve, is to confer on the Government the power to make an order under the Public Bodies Act that would abolish the PWLB and transfer its functions to an eligible person, as defined in the Public Bodies Act. Let me assure noble Lords that the abolition of the PWLB, and the succession arrangements, will be subject to proper parliamentary scrutiny under the Public Bodies Act process. This proposal is purely about governance reform. The PWLB abolition will not impact on the prudential regime or local authorities’ existing loans with the PWLB, and local authorities will be able to undertake new borrowing from the successor body, as now, at rates that offer good value for money. Interest rates will continue to be a policy matter for HM Treasury.

Following the commencement of the provisions in this clause, the Government plan to publish a consultation document providing details of their proposals for abolition and succession, as required under the Public Bodies Act. After taking into account responses from the consultation, both Houses will have the opportunity to scrutinise the draft legislation, which will of course be accompanied by the explanatory document, as required by Section 11 of the PBA. Abolition of the PWLB would remove bureaucracy and align the accountability for lending to local authorities with

9 Feb 2015 : Column 1090

DMO’s existing responsibilities for day-to-day operational management. This is in line with the Government’s wider efficiency and modernisation agenda.

I am conscious that these amendments are so uncontroversial that this may be the last moment that I am on my feet in a discussion on the Infrastructure Bill. I would like to take this opportunity to thank my noble friends Lady Verma and Lord Ahmad, who have been stalwart in leading significant parts of the Bill. I thank your Lordships all across the House. The Bill has involved many different departments; individuals with different specialisation and Peers who have followed different issues have had to co-ordinate and manage across the complexities. They have done so brilliantly. I think we have collectively improved the Bill. It has also involved working closely with the other place. This is also an opportunity for me to say particular thanks to the Bill team, which has had to deal with some of the most extraordinary complexity in managing this whole process. Frankly, I think it has done it brilliantly.

I will of course wish to respond if issues are raised by any other Members of the House, but I did not want to lose the opportunity to say thank you, since I am aware that the amendments I am moving are so technical and uncontroversial that this may be my last time to speak. I beg to move.

Lord McKenzie of Luton: My Lords, I am bound to say that when I saw references to the Public Works Loan Board being abolished a sense of nostalgia swept over me. It took me back to my first finance committee meeting of Luton Borough Council in 1976—noble Lords will remember that in those days if you turned up with a briefcase you were put on the finance committee straight away—and to the regular reports of the borough treasurer thereafter. Little did one realise that we were then in the comparative twilight of the commissioners’ existence.

The most recent Annual Report and Accounts, in describing the functions of the commissioners, says that they derive from legislation of 1875 and 1968, which has been referred to. However, the report also says that the PWLB’s existence can be traced back to 1793. It became established on a permanent basis in 1817. It is asserted that changes over time have made the PWLB less relevant, to the point where it is suggested that its purpose is redundant. As we have heard, its functions and powers have been delegated to the Debt Management Office. A significant development was the prudential borrowing regime introduced under the previous Labour Government, which obviated the need for local authorities to go through a credit approval process. In fact, the prudential borrowing regime has proved to be a major success and has demonstrated that local authorities act responsibly and prudently when it comes to exercising borrowing powers. The proposition is to include the PWLB in Schedule 1 to the Public Bodies Act 2011 so that the Government can use powers under that Act to abolish it and transfer its functions to an eligible person. It seems as though any necessary consultations are to take place under the PBA processes—presumably about “how” to abolish it, not “if”.

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My colleagues in another place have already challenged the Government on why the consultation promised last July has not taken place. They have also reasonably sought to clarify what residual functions the PWLB undertakes. The foreword to the 2013-14 Annual Report and Accounts described the functions of the commissioners as being,

“to consider loan applications from local authorities and other prescribed bodies and, where loans are made, to collect the repayments”.

As a practical matter, as we know, these responsibilities have been delegated to the secretary—effectively the accounting officer. The PWLB borrows from the National Loans Fund to fund its loans. All interest and loan repayments are paid over to the National Loans Fund. Commissioners are prepared to lend to an authority up to the available capacity in its prudential borrowing limit.

It seems to us that although the functions have been delegated to others the PWLB’s nominal powers are surely not insignificant. At 31 March 2014 it held loans of approximately £63.7 billion, with corresponding liabilities of the same amount. Its powers to facilitate borrowing and manage loans must be significant, even though delegated. As my honourable friend Roberta Blackman-Woods MP stated in another place, we all,

“want assurance that there is good oversight”—

and transparency—

“of local government borrowing”.—[

Official Report

, Commons, Infrastructure Bill Committee, 13/1/15 col. 333.]

Perhaps the Minister would take the opportunity to say how she considers that this will be provided under any new arrangements. Having said all that, we certainly will not oppose these amendments.

Baroness Kramer: My Lords, the consultation that will come under the Public Bodies Act is obviously an important step in the process to allow for full discussion of the kinds of issues that the noble Lord, Lord McKenzie, has discussed today. At the moment the commissioners simply meet on an annual basis. They note the loans issued and review the annual report prepared by the officials. I think this House would agree that sometimes it is important to recognise reality and make sure that the formal arrangements match the actuality. We hope that this is a step in that direction.

Lord Davies of Oldham: Before the Minister sits down, perhaps I may just add my congratulations to the Bill team on dealing with a Bill that has been one of the more absurd creations of government in recent history. The Department for Transport has been responsible for invasive species and for fracking. Long after Christmas time—if ever there was a Christmas tree of a Bill, this is it—we got a suggestion that we would have clauses on the Electronic Communications Code. It was once said in the other place, “Take away this bauble”. If that part of the Bill had arrived here, I would have repeated that phrase in relation to the clause. I congratulate the Minister on having piloted the Bill through, but I hope it is not a precedent for how the Government in fixed-term parliaments produce a measure that has everything in it including the kitchen sink.

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Baroness Kramer: My Lords, I shall just say in passing that I take comfort in the fact that the work we have done in the Bill is of genuine value. I know that particularly from the transport areas in which I have been engaged. I really appreciate the input that has come from this House but I also think that the Government have taken the leadership in, for example, underpinning future funding of our road strategy. Fracking has an important role to play, but the framework necessary for it has been forwarded by this Bill on a wide range of matters that might have been overlooked. Something as simple as the mayoral development orders will let local authorities use that mayoral capacity to achieve the kind of housing projects that they want very much for their areas and their residents. It may be a complex Bill with many different items in it but I do think that we will be better for it. I thank the House.

Motion agreed.

That this House do agree with the Commons in their Amendments 24 to 32.

Motion agreed.

That this House do agree with the Commons in their Amendment 33, and do propose Amendment 33A as an amendment to Amendment 33.

Motion agreed.

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That this House do agree with the Commons in their Amendments 34 to 48.

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(1) The Mayor of London may by order (a Mayoral development order) grant planning permission for development specified in the order on one or more sites specified in the order.

(2) The site or sites must fall within—

(a) the area of a local planning authority in Greater London, or

(b) the areas of two or more local planning authorities in Greater London.

(3) The Secretary of State may by development order specify an area or class of development in respect of which a Mayoral development order must not be made.

61DB Permission granted by Mayoral development order

(1) Planning permission granted by a Mayoral development order may be granted—

(a) unconditionally, or

(b) subject to such conditions or limitations as are specified in the order.

(2) A condition imposed by a Mayoral development order may provide for the consent, agreement or approval to a matter specified in the condition to be given by one or more persons specified in the condition.

(3) A person specified in a condition must be the Mayor of London or a relevant local planning authority.

(4) The Secretary of State may by development order provide that, if the consent, agreement or approval of a person required by a condition imposed by a Mayoral development order is not given within a specified period, that consent, agreement or approval may be sought from a specified person.

(5) In subsection (4) “specified” means specified, or of a description specified, in the development order.

(6) The Secretary of State may by development order make provision for a person to apply for planning permission for the development of land without complying with a condition imposed on the grant of planning permission by a Mayoral development order.

(7) A development order under subsection (6) may, in particular make provision similar to that made by section 73, subject to such modifications as the Secretary of State thinks appropriate.

(8) So far as the context requires, in relation to—

(a) an application for the consent, agreement or approval of the Mayor of London to a matter specified in a condition imposed by a Mayoral development order, or

(b) the determination of such an application,

any reference in an enactment to a local planning authority (however expressed) includes a reference to the Mayor.

(9) For the purposes of this Act a local planning authority is a relevant local planning authority in relation to a Mayoral development order or proposed Mayoral development order if a site or part of a site to which the order or proposed order relates is within the authority’s area.

61DC Preparation and making of Mayoral development order

(1) The Secretary of State may by development order make provision about the procedure for the preparation and making of a Mayoral development order.

(2) A development order under subsection (1) may in particular make provision about—

(a) notice, publicity and inspection by the public;

(b) consultation with and consideration of views of such persons and for such purposes as are specified in the order;

(c) the making and consideration of representations.

(3) A Mayoral development order may be made only in response to an application to the Mayor of London by each relevant local planning authority.

(4) A proposed Mayoral development order may be consulted on only with the consent of each relevant local planning authority.

(5) A Mayoral development order may not be made unless the order has been approved, in the form in which it is made, by each relevant local planning authority.

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(6) If the Mayor of London makes a Mayoral development order, the Mayor must send a copy to the Secretary of State as soon as is reasonably practicable after the order is made.

61DD Revision or revocation of Mayoral development order

(1) The Mayor of London may at any time revise or revoke a Mayoral development order with the approval of each relevant local planning authority.

(2) The Mayor of London must revise a Mayoral development order if the Secretary of State directs the Mayor to do so (and the requirement for the approval of each relevant local planning authority does not apply in those circumstances).

(3) The Secretary of State may at any time revoke a Mayoral development order if the Secretary of State thinks it is expedient to do so.

(4) The power under subsection (3) is to be exercised by order made by the Secretary of State.

(5) If the Secretary of State revokes a Mayoral development order the Secretary of State must state the reasons for doing so.

(6) The Secretary of State may by development order make provision about—

(a) the steps to be taken by the Secretary of State before giving a direction or making an order under this section;

(b) the procedure for the revision or revocation of a Mayoral development order.

(7) A development order under subsection (6) may in particular make provision about—

(a) notice, publicity and inspection by the public;

(b) consultation with and consideration of views of such persons and for such purposes as are specified in the order;

(c) the making and consideration of representations.

61DE Effect of revision or revocation on incomplete development

(1) This section applies if planning permission for development granted by a Mayoral development order is withdrawn at a time when the development has been started but not completed.

(2) For this purpose planning permission for development granted by a Mayoral development order is withdrawn—

(a) if the order is revoked under section 61DD, or

(b) if the order is revised under that section so that it ceases to grant planning permission for the development or materially changes any condition or limitation to which the grant of permission is subject.

(3) The development may, despite the withdrawal of the permission, be completed, subject as follows.

(4) If the permission is withdrawn because the Mayoral development order is revoked by the Mayor of London, the Mayor may make a determination that subsection (3) is not to apply in relation to development specified in the determination.

(5) A determination under subsection (4) must be published in such manner as the Mayor of London thinks appropriate.

(6) If the permission is withdrawn because the Mayoral development order is revoked by an order made by the Secretary of State under section 61DD, the order under that section may provide that subsection (3) is not to apply in relation to development specified in that order.

(7) If the permission is withdrawn because the order is revised as mentioned in subsection (2)(b), the revised order may provide that subsection (3) is not to apply in relation to development specified in the order.

(8) The power under this section to include provision in an order under section 61DD or a Mayoral development order may be exercised differently for different purposes.”

PART 2

CONSEQUENTIAL AMENDMENTS

2 The Town and Country Planning Act 1990 is amended as follows.

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3 In section 56(5)(a) (time when development begun where planning permission granted by general or local development order) for “or a local development order” substitute “, a local development order or a Mayoral development order”.

4 In section 57(3) (planning permission not required for normal use of land where planning permission for development of land granted by development order etc) after “a local development order” insert “, a Mayoral development order”.

5 In section 58(1) (planning permission may be granted by development order etc) after “a local development order” insert “, a Mayoral development order”.

6 In section 62(2A) (applications for planning permission: references in subsections (1) and (2) to applications for planning permission to include applications under section 61L(2)) after “references to” in the second place insert “—

(a) applications for consent, agreement or approval as mentioned in section 61DB(2), and

(b) ”.

7 In section 65(3A) (notice etc of applications for planning permission: references in subsections (1) and (3) to applications for planning permission etc to include applications under section 61L(2) etc) after “references to” in the second place insert “—

(a) any application for consent, agreement or approval as mentioned in section 61DB(2) or any applicant for such consent, agreement or approval, and

(b) ”.

8 (1) Section 69 (register of applications etc) is amended as follows.

(2) In subsection (1) (duty of local planning authority to keep register containing information about planning applications etc) after paragraph (c) insert—

“(cza) Mayoral development orders;”.

(3) In subsection (2)(b) (requirement for register to contain information about local development orders etc) after “local development order,” insert “Mayoral development order,”.

9 (1) Section 71 (consultations in connection with determinations under section 70) is amended as follows.

(2) In subsection (2ZA) (references in subsections (1) and (2) to applications for planning permission to include applications under section 61L(2)) after “references to” in the second place insert “—

(a) an application for consent, agreement or approval as mentioned in section 61DB(2), and

(b) ”.

(3) In subsection (3A) (disapplication of consultation requirement relating to caravan sites in case of neighbourhood development order) after “granted by” insert “a Mayoral development order or”.

10 In section 74(1ZA) (directions etc as to method of dealing with applications: references in subsections (1)(c) and (f) to planning permission etc to include approvals under section 61L(2) etc)—

(a) in paragraph (a) after “reference to” in the second place insert “—

(i) a consent, agreement or approval as mentioned in section 61DB(2), and

(ii) ”, and

(b) in paragraph (b) after “references to” in the second place insert “—

(i) applications for consent, agreement or approval as mentioned in section 61DB(2), and

(ii) ”.

11 In section 77(1) (reference of applications to the Secretary of State)—

(a) for “approval” substitute “consent, agreement or approval”, and

(b) after “a local development order” insert “, a Mayoral development order”.

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12 In section 78(1)(c) (right of appeal against refusal of application for approval under development order etc.) after “a local development order” insert “, a Mayoral development order”.

13 In section 88(9) (provision for permission for development in enterprise zones does not prevent planning permission from being granted by other means) after “a local development order” insert “, a Mayoral development order”.

14 In section 91(4)(a) (provisions about general condition limiting duration of planning permission do not apply to permission granted by development order etc) after “a local development order” insert “, a Mayoral development order”.

15 (1) Section 108 (compensation for refusal etc of planning permission formerly granted by development order etc) is amended as follows.

(2) In the heading after “local development order” insert “, Mayoral development order”.

(3) In subsection (1)—

(a) in paragraph (a) after “a local development order” insert “, a Mayoral development order”, and

(b) after “the local development order” insert “, the Mayoral development order”.

(4) After subsection (1) insert—

“(1A) Where section 107 applies in relation to planning permission granted by a Mayoral development order—

(a) subsection (1) of that section has effect as if it provided for a claim to be made to, and compensation to be paid by, the Mayor of London rather than the local planning authority, and

(b) subject to subsection (1B), sections 109 to 112 have effect where compensation is payable by the Mayor of London under section 107(1) as if references to the local planning authority (however expressed) were references to the Mayor of London.

(1B) Subsection (1A)(b) does not apply to section 110(2) or (4).” (5) In subsection (2)—

(a) after “a local development order” insert “, a Mayoral development order”, and

(b) after “revocation” in both places insert “, revision”.

(6) In subsection (3B) after paragraph (b) insert—

“(ba) in the case of planning permission granted by a Mayoral development order, the condition in subsection (3DA) is met, or”.

(7) After subsection (3D) insert—

“(3DA) The condition referred to in subsection (3B)(ba) is that—

(a) the planning permission is withdrawn by the revocation or revision of the Mayoral development order,

(b) notice of the revocation or revision was published in the prescribed manner not less than 12 months or more than the prescribed period before the revocation or revision took effect, and

(c) either—

(i) the development authorised by the Mayoral development order had not begun before the notice was published, or

(ii) section 61DE(3) applies in relation to the development.”

16 In section 109(6) (apportionment of compensation for depreciation: interpretation) in the definition of “relevant planning decision” after “the local development order” insert “, the Mayoral development order”.

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17 In section 171H(1)(a) (compensation for temporary stop notice: application where activity authorised by development order etc) after “a local development order” insert “, a Mayoral development order”.

18 In section 264(5)(ca) (land which is treated as operational land of a statutory undertaker by virtue of planning permission for its development granted by a local development order etc) after “a local development order” insert “, a Mayoral development order”.

19 (1) Section 303 (fees for planning applications etc) is amended as follows. (2) After subsection (1) insert—

“(1ZA) The Secretary of State may by regulations make provision for the payment of a fee to—

(a) the Mayor of London in respect of an application for consent, agreement or approval as mentioned in section 61DB(2) or the giving of advice about such an application;

(b) a specified person in respect of an application for consent, agreement or approval for which provision is made under section 61DB(4) or the giving of advice about such an application.”

(3) After subsection (10) insert—

“(10A) If the Mayor of London or a specified person calculates the amount of fees in pursuance of provision made by regulations under subsection (1ZA) the Mayor of London or the specified person must secure that, taking one financial year with another, the income from the fees does not exceed the cost of performing the function.”

(4) After subsection (11) insert—

“(12) In this section “specified person” means a person specified by development order under section 61DB(4).”

20 In section 305(1)(a) (contributions by Ministers towards compensation paid by local authorities) after “local authority” insert “, the Mayor of London”.

21 In section 324 (rights of entry) after subsection (1A) insert—

“(1B) Any person duly authorised in writing by the Secretary of State, a local planning authority or the Mayor of London may at any reasonable time enter any land for the purpose of surveying it in connection with—

(a) a proposal by a local planning authority to apply to the Mayor of London for the Mayor to make a Mayoral development order, or

(b) a proposal by the Mayor of London to make a Mayoral development order.”

22 (1) Section 333 (regulations and orders) is amended as follows. (2) In subsection (4) after “61A(5)” insert “, 61DD(4),”.

(3) In subsection (5) after “Wales),” insert “61DD(4),”.

23 In section 336(1) (interpretation) at the appropriate place insert— ““relevant local planning authority” is to be construed in accordance with section 61DB(9);”.”

Motion agreed.

House adjourned at 7 pm.