Planning and Infrastructure Bill (Fifth sitting)

Gideon Amos Excerpts

Committee stage
Tuesday 13th May 2025 Public Bill Committees

[Paul Holmes (Hamble Valley) (Con)]

Good morning, Mrs Hobhouse. It is a pleasure to serve under your chairmanship and to see you again. I welcome both Ministers to their places. As soon as you said that we can start removing layers, Mrs Hobhouse, my button suddenly popped off. I apologise, and I guarantee that I will not remove any more layers, for fear of disrupting the Committee.

The clause amends the Electricity Act 1989, requiring the Gas and Electricity Markets Authority to implement a cap and floor scheme for long-duration energy electricity storage or LDES. We are concerned that the clause introduces unnecessary bureaucracy and will distort the market with the introduction of the scheme. I have several questions on this. Can the Minister explain what criteria will determine the initial cap and floor levels? More importantly, how frequently will they be reviewed to stay responsive to market changes?

We know that the scheme aims to provide financial stability to LDES for operators by setting revenue caps and income floors, and to encourage investment in this technology. However, will LDES operators and investors have a role in reviewing or adjusting the scheme to ensure that it reflects real-world conditions? Will there be eligibility criteria for a formal application process for operators to access the scheme, ensuring fair access for all players? Those concerns, we would argue, highlight the need for clarity and effective integration with broader energy policies and to ensure the scheme’s success. I look to the Minister for clarification on those elements of the clause. We do not intend to divide at this stage, but we will provide further scrutiny at further stages of the process.

[Gideon Amos (Taunton and Wellington) (LD)]

Good morning, Mrs Hobhouse, it is especially a pleasure to serve with you in the Chair. Liberal Democrats are supportive of a scheme to encourage long-duration energy storage and, for that reason, are generally supportive of the clause. Long-duration energy storage is crucially needed, including, of course, battery storage.

There are instances of fires in battery storage facilities, but there is no reason why they should not be built safely—they can and are built safely. We ask the Ministers to consider whether fire brigades should be statutory consultees in applications for battery storage proposals. That is not the case at the moment, which seems perverse, given that there is an acknowledged fire risk that needs to, and can, be dealt with. We should have fire services as statutory consultees to ensure that happens.

[John Grady (Glasgow East) (Lab)]

I rise simply to support the provision. The first point to note is that this sort of technology has always been critical for the electricity system, which is why we have plants such as Cruachan in Scotland—which I commend to everyone as a great place to visit on their summer holidays—and Dinorwig in Wales. We need more investment in this.

As someone who has been involved in the energy sector for almost 30 years, the simple fact of the matter is that this technology will not be invested in without additional support. The plan for a cap and floor mechanism is well worked through, and has a reasonable pedigree in the electricity industry for supporting investment. Clause 21 seeks to introduce that. Quite properly, it is technology-agnostic, because there is a great deal of innovation in this sector. The provision is important for decarbonisation, energy security and jobs across the British Isles; I therefore support it.

--- Later in debate ---

[Gideon Amos]

I rise to speak to new clause 102, which stands in the name of the Liberal Democrats. This would ensure that all communities hosting major energy infrastructure—solar farms, wind farms, major battery storage, gas, nuclear or other power stations, as well as transmission infrastructure, which is already covered by the Bill—would receive a benefit of 5% of the annual revenue of that project.

Safeguarding the future by tackling climate change is vital, but we are only going to achieve that if we bring communities with us and make it affordable for households. We recognise, and of course welcome, the provision in the Bill for community benefits for those near transmission lines, but those living beside nuclear, gas, coal-fired or other power stations are not eligible for any community support. For example, I supported the development of Ham Farm solar park in Taunton, but none the less the community gets no benefit for the significant impact it is having on that community.

It is time that we had a system that gave community benefit for all energy infrastructure if we are to persuade communities and work with communities to host that infrastructure. If we are going to move Britain to a low pollution energy future with more home-grown energy—something the Liberal Democrats strongly support—we must be willing to compensate those expected to live with and host these enormous developments. It is time, in short, that local people benefited from national energy projects.

Liberal Democrats have consistently led the way on community benefit. My right hon. Friend the Member for Kingston and Surbiton (Ed Davey) brought in the first community benefit system of this kind. In 2013, when he was Secretary of State and making the UK the biggest offshore energy generator in the world, he said:

“Communities hosting renewable energy installations play a key role in meeting the national need for secure, clean energy. It is only right that local people should be recognised and rewarded for that contribution”.

He continued:

“developers already offer community benefit packages on a voluntary basis, we challenged them to do more”. —[Official Report, 6 June 2013; Vol. 563, c. 116WS.]

He then announced an increase in the recommended community benefit package in England from £1,000 per megawatt of installed capacity per year to £5,000, which remains the basis of the system today. Now it is time to extend that benefit to all energy, and to make it proportional to the revenue raised by energy projects. My hon. Friend the Member for Inverness, Skye and West Ross-shire (Mr MacDonald), who is a real champion for his constituency, proposed a scheme such as is set out in new clause 102 to Highland council back in 2021. It is important to recognise that the industry has contributed in this area, and in renewables especially.

In February 2024 the Government, in their document, “Developing Local Partnerships for Onshore Wind in England: Government response”, endorsed the 2013 system of £5,000 per megawatt installed capacity. Our new clause would mean that 5% of revenue from all energy projects goes to local communities. To put some figures on that, Grubb and Garjardo at UCL Bartlett estimate that, in a good year for energy generators such as 2022, UK revenue from renewables was £15.5 billion. Put that across 53,000 megawatts of installed capacity, meaning that £288,00 revenue per megawatt of installed capacity was raised, and 5% of that would be around £14,000 in community benefit per megawatt of installed capacity. In less good years, such as 2021, it might be around £7,000 per megawatt of installed capacity.

With average electricity bills in households being £730 in the UK, it is also important to secure reductions in bills by adopting the Liberal Democrat policy in our manifesto of finally decoupling electricity prices from the wholesale gas price. Based on Energy UK’s figures, that would mean a reduction in electricity costs per household of around £200 per year. The sums yielded to communities through the new clause—around £7,000 in 2021—would be comparable with the volunteered figure of £5,000 from the industry, but with the added benefit that when revenues increase, the community benefit would also increase.

So far the Government have taken only limited steps, which are welcome; but as part of the proposals that we put forward for a similar system in a debate in Westminster Hall in October, we were encouraged by the Minister, the hon. Member for Rutherglen, who said:

“On community benefits in particular, we are continuing—at pace”—

that key word—

“the work started by the previous Government to review how we can effectively deliver benefits for communities living near this infrastructure.”

He said that they were,

“developing clear guidance on community benefits for both the infrastructure and the transmission networks.”—[Official Report, 15 October 2024; Vol. 754, c. 276WH.]

My hon. Friend the Member for Inverness, Skye and West Ross-shire provides an example from the highlands. It is in the periphery of the UK—the highlands and elsewhere—that many of the biggest energy projects are located. Typically, they are areas where there are high levels of fuel poverty, limited access to affordable housing, lower wages, and high costs for electricity connection and heating. Rural areas, where many major projects are built across the UK, share the characteristics of departing young people, sparse and remote public services, especially after the ending of the rural service delivery grant, and poor infrastructure.

Other countries provide compelling examples of what can be done. Denmark, for example, requires new renewable projects to offer at least 20% ownership to local residents. In Germany, local authorities, or Länder, such as Munich, develop their own offshore wind farms, and community benefit comes from the tax revenue that they provide.

Our new clause would see two thirds of the benefit funds designated for the community, by which we mean to be spent in the council ward affected, where community groups themselves could and should be delegated with the power to manage and distribute those funds, with one third used for community benefit at a more strategic level for the council area decided by elected councillors. Fuel vouchers, affordable housing and investment into health and social care could be among the priority candidates for the spending of these benefits. It is unacceptable that these communities, which provide the backbone of our energy revolution, often see little financial benefit from hosting such infrastructure.

[Michael Shanks]

I thank all Members for an interesting debate. Amendment 83 was tabled by the hon. Member for West Aberdeenshire and Kincardine. He is ever present in these discussions, but never present—

--- Later in debate ---

[Michael Shanks]

It is a very important point, and this will come through in the discussions that we will have more generally in this Committee around community consultation, but it will continue to play an important part. I think it is important to separate out any question of compensation from community benefit.

This is not a compensation scheme, and landowners that currently are compensated for infrastructure being built will continue to be compensated through whatever channels that is decided in. This is a community benefit, so it is additional. It is about recognising that it is critical for the future of the country that we build new grid infrastructure, and that if someone hosts that infrastructure they should gain some benefit from doing so. This is our proposal for doing that, alongside the community benefit funds that we have announced.

The Government believe that it is appropriate to set out the full detail on this in regulations, as is the case in many such schemes that have been set up over the years, due to the technical level of detail that will be required, and have drafted this clause to make sure that it applies only to transmission infrastructure, as it is not the intention that it should apply to other technologies. I commend clause 22 to the Committee.

That brings me to new clause 102, tabled by the hon. Member for Taunton and Wellington, which seeks to introduce a scheme that would ensure communities are provided with financial benefits from hosting major energy infrastructure projects from a range of technologies. I welcome the intent of this measure. Indeed, I have had a number of conversations with the hon. Gentleman’s colleagues on this very topic over the past nine months in which I have had the privilege of having this job, and spoken fairly recently to his colleague, the hon. Member for Inverness, Skye and West Ross-shire (Mr Angus MacDonald)—I was in his constituency yesterday, seeing the investment that this Government have made in port infrastructure in his constituency.

We therefore agree broadly with the hon. Member for Taunton and Wellington’s point about how communities should benefit from all this energy infrastructure, but the new clause is not the right way to do it. We are already considering—he quoted myself to me, and I was delighted to hear I was fairly coherent in that debate—the question of wider community benefits. Clearly, at the moment most such community benefit schemes are voluntary schemes run by developers. It is important to say that some of those are actually hugely successful, and communities welcome the collaborative approach in drawing them up, but others are very unsuccessful, and leave communities without the genuine benefits that they should get. We are therefore looking at this really closely at the moment.

As my hon. Friend the Member for Basingstoke noted, we published guidance in May 2025 on community benefit funds for those who live near electricity transmission infrastructure, and shortly we will publish updated guidance for onshore wind in England, which, of course, follows the 10 years of the previous Government’s ban in England. We are also exploring options for our overall approach to community benefits, to provide consistency across different technologies and to maximise the ambition from that. We have left on the table the option of that being mandatory in every case, but we want to look closely at how that would work, and how the design would work to ensure that we are not setting a scheme that does not suit the flexibilities that individual communities might want to take advantage of.

I reiterate that communities are providing a service to this country when they host clean energy infrastructure and there should be a benefit from it. Towards the end of the hon. Gentleman’s speech, he rather veered off community benefits and into an equally important space on community ownership, which is something that I have also had a number of important conversations about. We see ownership of energy by communities as a really important step as well, and that is a step up from community benefits.

[Gideon Amos]

I am extremely grateful to the Minister for addressing the serious points in the new clause, and particularly for saying that mandatory schemes will not be taken off the table. He was coherent back in October, except—if I might suggest—for the phrase “at pace”. Could he explain what “at pace” means in this context, in terms of what the timescale might be?

[Michael Shanks]

That is a question that I have asked myself many times over the past nine months. The problem is that we inherited a number of these things from the previous Government and we are working through them.

I have regular meetings on the subject. It is really important that we get this right, because we need to strike the balance: ultimately, the community benefit funds will, one way or another, be paid for by bill payers, but we want communities to have a real benefit. The balance has to be right because we are trying to bring down bills for everyone across the country. The Conservative amendment would increase people’s bills, but we are determined to try to bring them down. There is a balance to be struck.

We feel that this is an exciting moment to drive community ownership forward. A key aim of Great British Energy will be to drive forward the local power plan, so that communities do not just have benefits from infrastructure, but own some of those benefits. A number of hon. Members across the House have mentioned the real benefits of communities having a stake in projects—they can spend the money on whatever they want to spend it on, rather than on what a scheme might define. The two go hand in hand.

The bill discount scheme is an important step to drive forward community acceptance of new network infrastructure. We will develop proposals at pace for the hon. Member for Taunton and Wellington and for communities right across the country on the wider aspects of energy infrastructure. I hope that he will not move his new clause 102.

--- Later in debate ---

[Matthew Pennycook]

Clauses 32 and 33 relate to public inquiries under the Transport and Works Act. Clause 32 will amend the circumstances in which an objection is considered to an application under that Act. Currently, if an objection is raised to an application under the Act, a public inquiry or hearing can be required to be held, even if the objection is deemed to lack substance. That can result in costly and lengthy public inquiries taking place, even where objections lack merit.

The length of the inquiry process can range greatly depending on the complexity of what is being examined, from six months to two years. Clause 32 will mean that a public inquiry is held only when an objection is raised that is considered by the determining authority to be serious enough to merit such treatment. A streamlined process for considering objections saves time and cost for applicants. All objections will continue to be decided—I want to stress this point—entirely on the merits of the arguments put forward. This not about removing the voices of individuals or communities; instead, it ensures that the objections process remains proportionate, so serious objections are given due attention.

Clause 33 makes amendments to section 11 of the Transport and Works Act regarding decisions on costs arising from a public inquiry. It will enable an inspector conducting the public inquiry to make decisions on those costs, unless the Secretary of State or Welsh Ministers direct that a cost decision is to be determined by them. Currently, the inspector must write a report with recommendations of costs to the Secretary of State based on the conduct of parties taking part in the public inquiry. That approach contrasts with the Planning Act 2008, where cost decisions are made by the examining authority.

By delegating the decision-making capability to the inspector conducting the inquiry, we will ensure that claims are resolved more quickly for all stakeholders. That will reduce administrative burden in determining such cases and save time, helping to deliver transport infrastructure more efficiently. The Secretary of State in England, and Welsh Ministers in Wales, will retain the ability to direct that a cost decision is to be determined by them should they not wish to delegate responsibility on a potentially contentious case. The clauses, as I have argued, will reduce unnecessary bureaucracy and administrative burdens, helping to deliver transport infrastructure more efficiently. I commend them to the Committee.

[Gideon Amos]

I rise to query some of the provisions. We understand that the Government’s proposal would effectively remove the automatic right to call a public inquiry. The Minister knows we are concerned that the Bill seeks to remove people from the process, and to remove the opportunity for objections in the planning process. That is a very serious concern for us. The clause proposes a public inquiry only where the Secretary of State

“considers that the objection is serious enough”.

--- Later in debate ---

[Matthew Pennycook]

Hopefully I can provide the hon. Gentleman with further clarification. I recognise and appreciate the valid concerns he raises. As things stand, it is not the case that any objection to an application of the kind we have described results in a public inquiry or hearing, but it can in many instances give rise to one.

For example, when an objection comes from a landowner whose land would be affected by compulsory purchase; when a local authority for the area concerned receives an objection that they do not consider frivolous or trivial; or when other concerns are raised that need to be considered, a public inquiry or hearing takes place. In many circumstances, that is appropriate. In others, it may be the case that an exchange of correspondence, for example, can achieve the same goal without the need for a lengthy and costly public inquiry. I hope that gives him some reassurance as to the type of circumstances—

[Gideon Amos]

Will the Minister give way?

[Matthew Pennycook]

I am pre-empting what the hon. Member is going to intervene on, so I will finish making the point and he can come back to me. I hope he is reassured as to why we consider the change necessary, and the outcome that we are trying to achieve.

The hon. Member raises an entirely valid point about the fact that it will be for the Secretary of State for Transport to decide on a case-by-case basis when objections meet the test that he rightly reiterated. I will reflect on how we might provide further clarity, perhaps through guidance on the circumstances in which that test should be applied, but I recognise there is a fair challenge about what cases will come through this route.

I hope the hon. Member will recognise that the problem we are trying to resolve is that under certain circumstances, as things stand, a public inquiry or hearing can be triggered where it is not necessary, and there may be a far more proportionate way of moving things on and responding to objections—for example, in an exchange of correspondence. I hope that reassures the hon. Gentleman somewhat. As I have said, I am happy to reflect and come back to the Committee with further thoughts on this point.

[Gideon Amos]

I simply say that doing away with, effectively, an automatic right to a public inquiry in certain circumstances, as the Minister has clarified, and replacing that with the words “serious enough” is a big leap. I strongly encourage the Minister to put on record guidance on what relevant parties can expect will be considered serious enough to merit a public inquiry.

[Matthew Pennycook]

I do not have much more to add. There is a genuine problem with the current arrangements that we need to resolve. As I have said, in some circumstances a public inquiry or hearing is not necessary; things can be dealt with in other ways. Under the current arrangements, public inquiries and hearings can be triggered even if an objection is considered to be lacking in substance. That is onerous and disproportionate, but the hon. Gentleman raises a fair point about the basis on which the Secretary of State for Transport will determine whether the objection is of the relevant level of seriousness to require a public inquiry or hearing. I am more than happy to come back to him on that point in due course.

Question put and agreed to.

Clause 32 accordingly ordered to stand part of the Bill.

Clause 33 ordered to stand part of the Bill.

Clause 34

Deadline for decisions

Question proposed, That the clause stand part of the Bill.