Delegated Legislation Committee

The Committee consisted of the following Members:

Chair: Esther McVey

† Barron, Lee (Corby and East Northamptonshire) (Lab)

† Bowie, Andrew (West Aberdeenshire and Kincardine) (Con)

† Griffiths, Alison (Bognor Regis and Littlehampton) (Con)

† Hatton, Lloyd (South Dorset) (Lab)

† Heylings, Pippa (South Cambridgeshire) (LD)

† Moon, Perran (Camborne and Redruth) (Lab)

† Opher, Dr Simon (Stroud) (Lab)

† Poynton, Gregor (Livingston) (Lab)

† Shanks, Michael (Minister for Energy)

† Smith, Rebecca (South West Devon) (Con)

† Snell, Gareth (Stoke on Trent Central) (Lab/Co op)

† Stainbank, Euan (Falkirk) (Lab)

† Stewart, Elaine (Ayr, Carrick and Cumnock) (Lab)

† Thomas, Bradley (Bromsgrove) (Con)

† Tufnell, Henry (Mid and South Pembrokeshire) (Lab)

† Turmaine, Matt (Watford) (Lab)

Young, Claire (Thornbury and Yate) (LD)

Noori Piperdy, Committee Clerk

† attended the Committee

First Delegated Legislation Committee

Monday 29 June 2026

[Esther McVey in the Chair]

Draft Pollution Prevention and Control (Fees) (Miscellaneous Amendments) Regulations 2026

I beg to move, That the Committee has considered the draft Pollution Prevention and Control (Fees) (Miscellaneous Amendments) Regulations 2026.

It is a pleasure to serve in this Committee under your chairmanship, Ms McVey. The draft regulations were laid before the House on 14 May. Before I outline the provisions to be made by the statutory instrument, I will briefly provide some context.

The Offshore Petroleum Regulator for Environment and Decommissioning, which for the sake of all our time I will now call OPRED, minimises the impact of the offshore oil and gas sector on the environment by controlling air emissions and discharges to sea, and by reducing disturbance over the life cycle of operations, from seismic surveys through to post decommissioning monitoring. OPRED recoups the eligible costs of its regulatory functions from industry in the offshore oil and gas sector in two ways: first, by using regulations that are covered by these draft fees regulations; and, secondly, by five charging schemes. The charging schemes do not require legislative change and will be amended administratively.

OPRED’s average income from fees is about £7.3 million annually, recovered from about 100 companies. Currently, the fees that OPRED charges are based on rates of £210 an hour for environmental specialists and £114 an hour for non specialists. Environmental specialists are technical staff who carry out the functions of the Secretary of State, and non specialists are support staff. OPRED’s fees are determined by multiplying the appropriate hourly rate by the number of hours worked by environmental specialists and non specialist staff.

The current hourly rates have been in force since July 2025. Having reviewed its cost base, OPRED has concluded that the existing rates needed to be revised to reflect today’s costs for regulatory services. During the review, OPRED also identified that some regulatory costs were not being fully recovered, in particular the cost of statutory advice from nature conservation bodies and certain costs associated with the UK energy portal, which is OPRED’s digital system for delivering regulatory services.

The revised cost base ensures that all eligible costs are met by those who benefit from the services, rather than by the taxpayer. That is consistent with the Treasury’s “Managing Public Money” principles, which require full cost recovery where appropriate. The revised hourly rates were approved by the Treasury in January 2026. The draft fees regulations will amend the charging provisions by increasing the hourly rate for environmental specialists to £256 and for non specialists to £130—there will be a quiz at the end to make sure that people know the difference between those two sets of numbers.

OPRED formally consulted the offshore industry on the rate change proposals and the cost base revision in February this year. The consultation, which launched on 17 February and closed on 13 March, sought views on the proposed rates and their implementation, and we received five responses. While that is a limited number of responses, the issues raised were broadly consistent. Respondents commented primarily on the scale of the proposed increases, including the cumulative impact over successive financial years, and made comparisons with inflation rates, and they expressed concerns about the transparency of the underlying cost base and the timing of implementation.

OPRED considered the consultation responses and concluded that the new rates accurately reflect the cost of carrying out its regulatory functions, despite being higher than the rate of inflation. OPRED acknowledged that the timing of the rate increase could cause issues for industry in relation to planning and budgeting, but it saw this as part of an anticipated annual process. The new hourly rates are expected to be brought into effect at the beginning of July, in line with rate changes in previous years. OPRED concluded that failure to implement the revised rates would result in costs falling on the taxpayer, rather than on those benefiting from its services. OPRED determined that the rates should be increased in accordance with the proposals in the consultation. A formal response was published in April 2026. OPRED’s fees regime guidance will be revised to reflect the new hourly rates.

I conclude by emphasising that the revisions to the hourly rates introduced by the draft regulations will allow OPRED to recover the eligible costs of providing regulatory services from those who benefit from them, rather than those costs falling on the taxpayer. I hope that all hon. Members will support the measure.

It is an absolute pleasure to serve under your chairmanship this evening, Ms McVey. As the Minister has eloquently set out, the draft regulations seek to increase the fees associated with a number of assessment requirements for the licensing of offshore activity, such as conservation of habitats assessments and offshore safety directives, and they are eminently sensible.

Hear, hear!

There is a first time for everything. I do not seek to stand in the way of these regulations, but I will raise the inherent irony illustrated here of a Government who have made clear their intention not to issue new licences for exploration yet are seeking to increase the costs associated with environmental impact assessments and other regulatory requirements. I hope it indicates the beginning of a change of course for the Government, but I fear that will not be the case. We can but hope.

This Government have decided time and again to move against our domestic energy industry, choosing to run down our North sea ecosystem rather than nurture the skills base and support the industry. Two weeks ago, the Aberdeen South by election—a referendum on our oil and gas industry that I will not stop talking about—saw the north east of Scotland return a decisive verdict. Will the Government listen?

The shadow Minister and I have this bout regularly, and he makes the same points as he always does. I congratulate him on the one by election that his party has won, but I am afraid that I do not have time to name all the by elections it has lost in recent years. However, I am absolutely delighted to find a bit of consensus between our two parties, and I welcome his support for the regulations.

On the wider point, as I have said repeatedly, our domestic oil and gas industry is hugely important and will continue to be so for many years to come, but so too is investing in the future of our energy industry beyond oil and gas. I hope that the same consensus we saw at the start of the shadow Minister’s speech might yet be found on our wider investment in the North sea, which benefits his constituents and indeed those of the new hon. Member for Aberdeen South (Douglas Lumsden).

Question put and agreed to.

Committee rose.