Scotland Act 2016 (Onshore Petroleum) (Consequential Amendments) Regulations 2017 — House of Lords, 2017-11-30
Topic: Energy
Charlotte Vere (Conservative, Centre-right): My Lords, the Scotland Act 2016 implements the Smith commission agreement by devolving a range of powers to the Scottish Parliament and Scottish Government. As recommended by the Smith commission, it was agreed that powers related to onshore oil and gas licensing, aside from those relating to royalties, would be devolved to Scotland The Scotland Act 2016 transfers legislative competence for onshore petroleum to the Scottish Government with the exception of matters relating to setting and collecting licence rentals. It also includes provisions for Scottish Ministers to exercise powers currently held by the Secretary of State or the Oil and Gas Authority in relation to onshore licensing in Scotland. These consequential amendments complement the provisions of the Scotland Act 2016 and assist in giving the Scottish Parliament and Scottish Ministers greater control over their onshore oil and gas resources The intention is to transfer the existing UK onshore licensing regime, as it applies in Scotland, to Scottish Ministers. This will provide Scottish Ministers with the powers to administer the existing onshore oil and gas licensing regime in Scotland and to create a bespoke licensing regime if they so wish To implement the relevant powers in the Scotland Act, we need to make two statutory instruments. First, these affirmative regulations make consequential amendments to the taxation legislation. Secondly, negative regulations will make consequential amendments to the licensing regime. BEIS officials have been working closely with the Scottish Government, HMRC, the Scotland Office and the Oil and Gas Authority to prepare the regulations. Once the Scotland Act 2016 provisions concerning onshore oil and gas are fully in force, onshore oil and gas licensing in Scotland will be the responsibility of Scottish Ministers and they will be responsible for granting relevant licences. Currently there are four onshore oil and gas licences in Scotland. There is no production from any of the licence areas I turn now to the detail of the regulations. These affirmative regulations make minor consequential amendments to taxation legislation to reflect the role of Scottish Ministers as the licensing authority in Scotland in order to allow the tax legislation to work as intended in relation to onshore areas in Scotland. The regulations provide for the position both before and after commencement of the Wales Act 2017, which makes equivalent provision for devolution of onshore oil and gas licensing to Wales. As recommended by the Smith commission, it was agreed that powers related to consideration payable for licences and related matters remain reserved and will therefore not be devolved to Scotland. This was set out in Sections 47 to 49 of the Scotland Act 2016 Taken together with the forthcoming negative regulations, these provisions transfer responsibility for onshore petroleum in Scotland to Scottish Ministers, including responsibility for existing licences. The provisions provide Scottish Ministers with the powers necessary to administer the existing onshore oil and gas licensing regime in Scotland and to create a bespoke licensing regime. Furthermore, with the commencement of Sections 47 and 48 as part of the devolution of onshore petroleum licensing, mineral access rights will also be devolved, transferring responsibility for the process by which rights of access to private property are determined, delivering another key recommendation of the Smith commission This affirmative statutory instrument could be laid in Parliament only after the Wales Bill received Royal Assent in January 2017, as it makes amendments that anticipate amendments made by the Wales Act 2017. The negative regulations will follow these affirmative regulations to make consequential amendments to the licensing regime. There has been no specific consultation on these technical amendments, since they are necessary to the effective operation of the provisions set out in the Scotland Act 2016, which was consulted on separately. Additionally, transferring powers from the UK Administration to a devolved Administration does not count as a regulatory provision, so we are not required to do a regulatory impact assessment To conclude, the regulations assist in giving the Scottish Parliament and Scottish Ministers greater control over their onshore oil and gas resources, complementing the provisions of the Scotland Act 2016. These regulations make minor amendments to legislation governing taxation to ensure a smooth devolution of powers for onshore oil and gas licensing to Scottish Ministers. This measure is an important step towards delivering a recommendation of the Smith commission agreement. I beg to move.