Infrastructure Projects (Community Benefit)

Ian Liddell-Grainger Excerpts

Thursday 18th October 2012 Westminster Hall

[Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con)]

I am absolutely delighted to serve under your chairmanship once again, Mr Walker. I congratulate you on your recent elevation to the chairmanship of the Procedure Committee; it is marvellous.

I am also delighted to introduce this debate. I had a debate recently on this issue with my hon. Friend the Minister before the House rose for the last recess. We have moved on, but given the enormous turnout—more chairs will have to be brought in to cope—I will give a bit of the history. Both Front-Bench spokesmen are fairly new in their job—the hon. Member for Liverpool, Wavertree (Luciana Berger) is now shadow Minister for Energy and Climate Change—so a bit of history on the Hinkley Point situation might be in order. This is not just about Hinkley Point, but it is the first project under national infrastructure planning for which infrastructure money from business rates might have to be considered, so I will give a little background.

The nuclear debate came to the fore under Prime Minister Tony Blair, when he made a courageous decision to restart the civil nuclear programme. That was absolutely right. Our dearly departed colleague, Malcolm Wicks, wrote the definitive works on the programme. A great deal of credit must be given to his memory. His way of dealing with the issue as Energy Minister was superb. There was then a long debate about which nuclear power station would be first. Hinkley Point was picked by EDF for various historical reasons to become the first station. In the meantime, EDF took over the fleet, including Hinkley B.

The importance of that was that local people always expected that there would be a Hinkley C at some time in the future. That was understood. There has been nuclear power in my constituency since 1957, long before even my predecessor, Lord King of Bridgwater. The beauty was that it was possible to talk to local people about their aspirations and hopes. The people in my area have always embraced nuclear energy. It has been there for so long and has a massive history. There is an enormous understanding of nuclear energy.

That is important, as the reason for this debate is to consider the issue in a wider context as well. Very large infrastructure projects, such as nuclear power stations, tend to be in areas that already have nuclear energy. The problems that we will face with infrastructure benefit will plague things such as High Speed 2, new runways, very large solar arrays and the Bristol barrage, just outside my constituency in that of my hon. Friend the hon. Member for Weston-super-Mare (John Penrose). A lot of this debate centres on what we do now. The decision will rest with the Government, and we need to make it sooner rather than later.

The scheme was signed off by the Leader of the Opposition, the right hon. Member for Doncaster North (Edward Miliband), when he was Minister of State. He said openly that we needed to be able to prove that, if an area took on a large infrastructure project, the people there would be given the benefit of the project. There are three ways to do so. First, it can be done through section 106 money; that has been negotiated by EDF with the local councils, signed off and dealt with. Secondly, it can be done straightforwardly with money from the Government, which I suggest is difficult in any political cycle but would be quite impossible this time. Thirdly, a percentage of the business rates can be returned to the local community.

The debate that we need to have on any infrastructure project concerns the length. A nuclear power station’s operational life is roughly 60 years. I cannot say what the technology will be in 60 years’ time. We may get a life extension of five or 20 years. The same goes for railways and barrages. Everything has a finite time span. Do we have precedents in the United Kingdom? Yes, we do. We have Sullom Voe in the Shetland Isles and the nuclear storage area at Drigg in Scotland, both of which get community benefit, and rightly so. Local communities took those facilities and were given the benefit. We are not reinventing the wheel. We are doing this with my hon. Friend the Minister, and the Opposition; I include them because I believe strongly that it is a national decision affecting MPs across all our countries, especially as Scotland is still part of the United Kingdom—it affects Scotland as well—and it will get more pronounced. The great thing about Hinkley is that, because it was expected, we are pushing against an open door. We know perfectly well that we must build it, partly for security purposes and partly because it is the right way to go, and we can discuss it extremely openly. That is where I am starting from.

Community benefit is a term that we are starting to get used to. The Prime Minister said—in a speech about housing, I accept—that we must get on with large projects. He is absolutely right. We cannot break or bend the planning process, but large infrastructure projects will not be dealt with by local planning authorities; they will be dealt with nationally, courtesy of the last Government’s Planning Act 2008—a good law that works well. However, once the planning decision has been made, the Government must decide exactly which way the project will go.

My hon. Friend the Minister has been extremely kind on all levels, and I thank him for his courtesy in dealing with me and communities in my constituency. I pay great tribute to him, because I know that it is difficult to be a new Minister. I am grateful to him for the time that he has spent trying to grasp what is going on in a huge infrastructure project. It is a 450-acre, £9.3 billion project. It is the same size as the Olympics; it will last for 60 years; and it will employ 7,000 people to build it and between 1,000 and 2,000 to operate it over its 60 years of operation—never mind building it and putting the site back to greenfield, mothballing it or whatever happens in future. Luckily, that will not happen on any of our watches—not even that of a young man like you, Mr Walker.

We parliamentarians spend a lot of time discussing different ways to channel money to enable big projects to proceed. We might not have made the national headlines, but only this week the House has dealt with the remaining stages of the Infrastructure (Financial Assistance) Bill—a measure that aims to pump-prime big projects, especially now that public-private finance is in such short supply. Hon. Members might think that that has nothing to do directly with community benefit, but it is closely linked, because new infrastructure happens only if somebody pays for it, and communities only accept infrastructure projects, no matter what the projects are, if they can see the benefit. HS2 is an obvious example that we all face at the moment.

For my sins, I am also a Member of the Council of Europe—a fact that normally I quietly hide. Therefore, I take the Eurostar to Council sessions in Strasbourg. Every time the train emerges on the French side of the channel tunnel, we start to pick up speed and motor, and I am reminded of how long it took for Britain to wake up to high-speed rail. One reason is our dreadfully slow planning system. Endless inquiries brought nothing but delay, while in France the farmers queued up to sell their land because French compensation was set high to encourage quick decisions. Obviously, this could be called bribery, but the French had high-speed trains almost 20 years before we did. We have now, cross-party, marvellously embraced the idea, made respectable by spending money on local facilities. Instead of letting farmers buy flashy new Citroëns, we have put the money into community funding.

Ultimately, however, community benefit still means money—money for things that the community needs to build facilities that will last. It is now the only decent formula by which major projects, especially contentious ones, can ever obtain public acceptance. Landfill tax, for example, is levied on companies that dispose of rubbish in holes in the ground. We all know it, because it applies in all our constituencies. The money is spent on projects that benefit the areas in which those holes are being filled in. That usually, although not in every case, involves setting up a charitable trust. That is a fair way to pay for the inconvenience of having garbage dumped on one’s doorstep. However, the construction of Hinkley C in my constituency is on a much larger scale than that. It is difficult to compare the inconvenience involved—in fact, we cannot compare it, so we must not—but there is still no formula set in stone to guarantee the lasting package of community benefit.

As I have already said, my hon. Friend the Minister and I faced each other in an Adjournment debate in the House just before it rose for the last recess. As I have also said before, I genuinely appreciate the positive approach of both the Government and the Opposition. I note with interest that the shadow Secretary of State has been asking questions about community benefit. I am absolutely delighted about that; they were very good and sensible questions.

I do not think that anyone disagrees with the idea that new nuclear power stations should qualify for community benefit, and I think that my hon. Friend the Minister agrees with me that there are severe limitations to section 106 agreements. I know that he will have talks with the Chief Secretary to the Treasury, and I am delighted that he has accepted my invitation to come down to Bridgwater to see for himself the challenges that we face and some of the solutions that we are trying to find to make things easier for the communities that are affected by the nuclear plant. I have known him long enough to know that he will arrive with an open mind and, as always, a willingness to listen.

All of us, not just my hon. Friend the Minister, have to face the fact that there is a degree of confusion among some of those responsible for local government in the area. I hasten to add that I do not think that anyone is confused about the project itself; we all understand it extremely well. There is a straightforward plan to rebuild the power station at Hinkley Point, which is just a few miles outside Bridgwater in my constituency. It has been talked about for years and is now in the final stages of planning.

Hinkley is absolutely vital to Britain’s energy needs; we could say that the Atlantic array in the Bristol channel and many other projects will be equally vital. Without the new capacity that the Hinkley plant will generate, the lights probably will go out; they will not go out straight away, but we are losing capacity.

The task of putting up a power station is a great deal harder than flicking any switch. As we all know, this project at Hinkley is a very complex and costly one. The construction work will involve huge teams of people and local disruption for a decade at least. Those enjoying the peace and quiet of Bridgwater and West Somerset are, to put it crudely, in for a severe shock. Everyone involved is trying hard to minimise the effects, and I pay tribute to everyone involved for doing so. However, there is no getting away from the fact that the long road to Hinkley C is not going to be easy.

I know, and my hon. Friend the Minister is also aware, that last weekend the Hinkley site was a honey-pot for the nation’s anti-nuclear lobby. It attracts many people, including the hon. Member for Wells (Tessa Munt), who is my neighbouring MP; apparently she sent a message by videolink last weekend. We are broad-minded in Somerset, as my hon. Friend the Minister knows. We are used to invasions by long-haired people with strange ideas. Glastonbury is just down the road. I go occasionally; I have to put a wig on. So we do not begrudge any protesters—anti-nuclear protesters or otherwise—marching and singing.

However, I have a slightly dim view of trespassers, especially those elected to Parliament, because all of us in the area live near Hinkley; I myself live very close to the plant. We understand the importance of nuclear energy; we are not scared by nuclear energy. As I have said, it has been part of our lives since 1957. We appreciate that there are risks involved—of course there are. We know that it is not just our problem, but our grandchildren’s problem and probably our great-grandchildren’s problem, too. In other words, my constituents have come to terms with nuclear power by genuine experience of it. People should take that on board when we talk about other infrastructure projects.

The first reactor was installed at Hinkley in the 1950s, and it was a pioneering operation both for Hinkley and Britain; it was a remarkable achievement. There are still people living who were involved in that project—designers and engineers who have watched Hinkley grow and who, I hope, will still be around to see the latest successor to the original plant go on-line.

As a result of our experience, we also understand that nuclear power is not to be treated lightly; once nuclear power arrives, it is there for life. The original Hinkley A station shut down some years ago, but we cannot just dismantle a reactor easily; dismantling one takes a lot of work. A reactor is visible and needs looking after. My hon. Friend the Minister is fully aware of the life-span of redundant nuclear power stations. Indeed, the very long life-span of nuclear energy provides the most compelling argument for a generous settlement of community benefit for the local people. I believe that a great deal of good can come our way because of Hinkley, and I also believe that nuclear power, in conjunction with other schemes, is the only viable option to bridge our energy gap. I will add that the Bristol barrage is a future option. We should be looking at it, and the Prime Minister is taking a keen interest in it, as the last Government did, which was marvellous.

However, local people need to feel that they have not been forgotten in all this process. Hinkley is probably a precedent; I hope that we are setting a good trend. The remarks of my hon. Friend the Minister during my recent Adjournment debate signalled a real commitment from the Government that community benefit will not be an afterthought; to be fair, it has not been an afterthought under the last Government or this one.

I do not wish to press my hon. Friend the Minister—I would not do that—but it would be extremely helpful today if he bestowed a few wise words for the benefit of the local people, who are slightly anxious about what will happen in the near and medium future. There has been an enormous amount of discussion in the local area about the proportion of business rates that will be used to provide a fund for the whole community. My hon. Friend referred to business rates specifically when he replied to my Adjournment debate before the recess—for that I am thankful—but I am still witnessing confusion among some local representatives about how such a fund might work.

In my area, a few elected councillors in quite senior positions have got it into their heads that the Government intend to create a special new fund. There is a danger of information vacuums. I dare say that we have all faced that danger and know of it from our own constituencies; it is not unique to my constituency or anyone else’s. Idle rumours tend to seep in and fill the gap. I do not mean to be rude to my hon. Friend, but let me describe my own understanding of the Government’s position, so that I have got it right in my own mind.

The Department for Communities and Local Government wants to let local authorities hang on to some of the business rates that they levy because that would demonstrate—quite rightly—localism, which is something that we have championed. Theoretically, councils will get the chance to use business rates to attract new enterprise, and if a proportion of those rates goes straight to councils rather than the Treasury that is also seen as a device to let local government stand firmly on its own financial feet, which I would like to think will save the Treasury and the nation an enormous amount of money.

Some of these ideas are in the Local Government Finance Bill, but there are limitations, probably the most frustrating of which relates to wind farms. If a wind farm—we have wind farms in my area, Mr Walker, as you are well aware—gets clearance to put up a turbine, the local council can retain a chunk of the business rates, because wind is supposed to be renewable, when it is blowing. I accept that nuclear power is not, strictly speaking, renewable, but it is carbon-neutral and has enormous benefits on the renewables side. It is essential that nuclear power is there when the wind does not blow and the wind turbines do not generate power. When that happens, nuclear is still there.

Can we get a brass farthing of those business rates for nuclear? In his response to me a few weeks ago, just before the House rose the last time, my hon. Friend the Minister helpfully pointed out that nuclear is defined as a low-carbon technology with an enormous contribution to make to this country. I completely agree. However, the rules therefore need to be tweaked; indeed, I suspect that they are about to be tweaked. If so, how will they be tweaked?

When Hinkley is ready for operations, its rateable value will possibly be of the order of £10 million a year; we do not quite know. As it stands, that money will go straight to the Treasury. That is unfair on Bridgwater and West Somerset, its councils and its residents. Let me just say that the Hinkley plant is right in the middle of my constituency. The rules say that we do not qualify because nuclear is not renewable. Nuclear is carbon-neutral, but not renewable.

The Department for Communities and Local Government conducted a consultation exercise before the rules were set and spelled out the terms of reference for any energy project. That exercise was meant to prove that wind power schemes were the only ones that would qualify councils to retain any form of business rates. However, the truth is exactly the opposite.

Let me demonstrate that by going through DECC’s checklist; I did it before the recess with my hon. Friend the Minister, but I do it again now for the benefit of the House now. The first point on the checklist was, “Creating a diverse energy mix”. Yes, Hinkley does that. “Decarbonising our economy.” Yes, we can do that. “Creating energy security.” Yes, absolutely. “Protecting consumers from fossil fuel price fluctuations.” Yes. “Driving investment and jobs.” Absolutely, as Hinkley C will need 7,000 people to build it and about 1,000 people to operate it. “Meeting carbon emissions reductions.” We can certainly do that. “Incentivising development for growth.” If hon. Members could see what is being built in my area, they would be most impressed and the unemployment rate in my area now is only 3.6%, thanks in large part to Hinkley and the work that is being done there.

In July, Sedgemoor council received a very encouraging letter about business rates from a senior Minister in the Cabinet Office, my hon. Friend for Dorset, West—

[The Minister of State, Department of Energy and Climate Change (Mr John Hayes)]

West Dorset.

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[Mr Liddell-Grainger]

My hon. Friend the Minister corrects me from a sedentary position, and I am very grateful to him for doing so. Yes, the letter was from the Minister for Government Policy, my right hon. Friend the Member for West Dorset (Mr Letwin). I will just quote a little bit of that letter:

“The design of the business rates retention scheme will ensure that there will be significant ongoing benefits to those authorities hosting low-carbon energy infrastructure, not just renewable energy projects.”

I wonder whether my hon. Friend the Minister can add anything to that today.

The formula for allocating business rates is based on where a project is. With HS2, it is much more complicated because of the lengths, but Hinkley is a good example, because of where it is. Hinkley Point is on the coast, just outside the boundary—by about 300 yards, for geographical reasons—of West Somerset district council. The area is incredibly rural, and pretty much in the middle of nowhere—that is why such projects are built in such places. The roads are narrow, the population is widely spread and the council has found it difficult to make ends meet financially.

Everyone knows that the only way to get heavy traffic to Hinkley Point is through my town of Bridgwater, off the M5, so the majority of the disruption will be not in West Somerset district council but in Sedgemoor. There are two slightly different things here, but a strict interpretation of the rules would provide West Somerset council with all the money. Regarding taking that on to other much bigger and longer projects, Crossrail, for example, does not come under that and has no intention of being included. We can imagine how complicated that would be.

Hinkley C will generate huge amounts not only of electricity but of business rates. I have taken a figure of £10 million a year—we do not know the actual figure. Therefore, for a local authority with limited resources, the arrival of a power station is like finding gold at the bottom of the garden, albeit in 10 to 12 years’ time. I do not think, however, and this is not what was suggested by our colleague Malcolm Wicks before he left, or by any other Minister or Government, that that is how business rates should be allocated. I hope that in the near future—perhaps even today—we can get a little clarification about what the thinking is.

My hon. Friend the Minister’s Department has created a Hinkley strategic development partnership, which includes all the councils involved, the chambers of commerce, and EDF Energy, which is leading on the development. I am absolutely delighted about that. In this modern day, we grandly call them stakeholders; actually, they are local people doing a good job of trying to carry forward what we all see as the future.

I hope that my hon. Friend will today confirm my interpretation of what we are discussing, because the matter is important for a lot of local people. I believe that he wants to bring everyone together in partnership, irrespective of district council borders, to find ways of spending a proportion of the business rates. It would be helpful if he could make that crystal clear, so that no district or county councillor—I do not have a unitary council—was left in any doubt that a future community benefits package had to rely on complete and active co-operation between the different local authorities. We must not have any rivalry. Hatchets need to be buried. We must do this as a partnership. That goes for any infrastructure project that we might face, as there are few that do not cross boundaries.

In any case, we are not talking about an immediate cash flow. Hinkley will be unable to produce any business rates until it becomes viable and is switched on, 10 to 12 years in the future, by which time local government may have completely altered. We do not even know who will be in government nationally—it is as least two Parliaments away—so now it is time to work together, and we have proof that the main authorities are capable of doing just that. The recent announcement of the final section 106 settlement, involving the county council and the two district councils, alongside EDF Energy, is a tremendous step forward. It is a multi-million pound settlement—huge amounts of money. That is welcome. People understand it. It took a long time to achieve and, as with all deals, some parties might be happier than others, but the essential is in the wording. It is an agreement that stands. It will involve EDF spending in the region of £94 million, to help to pay for many road improvements, and for work force training, facilities and all sorts of other things that the community feel they need.

The Minister and the Opposition are aware, however, that section 106 was never designed to deal with long-term legacy questions. Section 106 agreements must be “directly related” to the development, and they are limited and—dare I say it?—inflexible, capable of addressing only a narrow range of projects. That is where we have the problem. My hon. Friend and I have talked about that, and he has a full understanding of the issue, for which I am grateful.

The price for building Hinkley is roughly £9.5 billion to £10 billion. I am only concerned with a small fraction of that sum, a few million pounds a year to help local communities, and to prove that this Government—any Government—are concerned about the legacy of large infrastructure projects, to the benefit of local people. I know that the Minister is new to his task, but I have known him for a long time, and I know that he understands the issue—we have discussed it. I know that he has hit the ground running, and I know that any additional clues that he can provide today in resolving this problem will be gratefully received by my local communities and councillors, and the people within the Bridgwater and West Somerset constituency.

--- Later in debate ---

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

This is the first time I have had the opportunity to respond on behalf of the Opposition under your chairmanship, Mr Walker, and I look forward to it.

I congratulate the hon. Member for Bridgwater and West Somerset (Mr Liddell-Grainger) on securing this debate. He spoke eloquently in support of his constituency and constituents. I echo his tribute to my late hon. Friend the Member for Croydon North, Malcolm Wicks, who, excuse the pun, was a leading light in energy policy and did some great things for this country. We all miss him.

This is also the first time I have had the opportunity to debate with the Minister, whom I welcome to his new position. He is being kept very busy today.

This is an important debate. With our economy in the longest double-dip recession since the second world war, investment in infrastructure projects such as new nuclear is urgently needed to create jobs and boost confidence now and strengthen our economy for the future. We support new nuclear as part of a balanced energy mix that must also include renewables and carbon capture and storage. If we are to meet our climate change targets and secure our energy future, we cannot put all our eggs in one basket. A recent Institute for Public Policy Research report highlights the potential advantages of new nuclear. Nuclear is a tried and tested means of generating electricity; Last year, Dr Mike Weightman, the UK’s chief nuclear inspector, reported that there was nothing to call into question the viability of safe and reliable nuclear power in the UK.

Although important questions about decommissioning costs and capital overruns must be addressed, the chance to create thousands of jobs is too important to dismiss. The potential for economic growth must not be passed over and the necessity of securing our future energy supply cannot be ignored. With predictions of up to 32,000 additional jobs accruing from new nuclear, and an annual boost to our economy of more than £5 billion, the consideration of new nuclear generation is in the UK’s economic and energy interests. Many of those jobs will be highly skilled and well paid, and they will necessarily be in parts of the country that are crying out for additional employment. So developing new nuclear, and major infrastructure projects more generally, is important for our economy and security of supply.

There is recognition on both sides of the House that, although large-scale infrastructure projects are vital to our national interest, we need to ensure that the local communities in which they are situated also benefit directly. Page 62 of the Government’s “National Infrastructure Plan 2011” recognises that and commits to introducing community benefits for new nuclear, pledging to

“engage with developers and local authorities on community benefit and bring forward proposals by 2012 for reform of the community benefit regime to provide”—

this is the important point—

“greater certainty for all parties.”

Yet, almost 12 months later, we are still waiting for the Government to announce new proposals and to give that certainty.

[Mr Liddell-Grainger]

I am not defending the Minister in any way, but, as the hon. Lady knows, there has been a slight delay as EDF has had to put things back to buy a little more time because of the incredible complication. She has touched on that eloquently, for which I thank her. I, along with the Minister and my right hon. Friend the Member for West Dorset (Mr Letwin), have been working hard to ensure that a decision is made in the right time, rather than in a rush. As a local Member, I can safely tell the hon. Lady that I am happy that we are getting there in the right time.

[Luciana Berger]

I thank the hon. Gentleman for his intervention, although my point is wider than that. He referred to his particular project, but there is a wider commitment in the “National Infrastructure Plan 2011” to consider community benefit as a whole for all projects across the country.

In answer to a parliamentary question from the shadow Secretary of State, my right hon. Friend the Member for Don Valley (Caroline Flint)—I thank the hon. Gentleman for referencing those questions—the Minister said:

“The Department is currently considering proposals for a community benefit package for communities hosting new nuclear. Details of any decisions will be made available by the end of 2012.”—[Official Report, 15 October 2012; Vol. 551, c. 134W.]

I am hopeful that the Minister will be able to give us more detail today, as 2012 is nearly at an end.

The hon. Gentleman referred to the specific instance of Hinkley Point C a great deal. He made a forceful case for the Government to consider community benefit. He made a number of points and referred to facilities that would last: he talked about the long-term legacy impacts of any community benefit.

Hinkley Point C is a substantial development and is much larger than the stations that are already there. It has the potential to provide about 6% of the UK’s electricity and power, approximately 5 million homes. Hinkley Point C’s potential contribution is not to be understated. There will clearly be a short-term impact on the local area during the eight-year construction phase, with some 5,600 workers employed at the peak of construction—I acknowledge that the hon. Gentleman used the figure of 7,000.

[Mr Liddell-Grainger]

The hon. Lady is right about the site. Both the Minister and the former Secretary of State, the right hon. Member for Doncaster North (Edward Miliband), who is now Leader of the Opposition, acknowledge that the whole package for the area will be some 7,500 at its peak. I correct the hon. Lady, but she is right about the site itself.

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[Mr Liddell-Grainger]

My hon. Friend the Minister hits on an important point that I did not mention, although I should have done so; it was remiss of me. The Nuclear Industry Association, which he is aware of, has been superb in trying to get jobs and setting up infrastructure in my locality. It should be praised, because it has worked so hard in an industry that is starting up again in quick time. It has embraced the challenge laid down by the former Government and this one. My hon. Friend is an enormous supporter of the job done by the NIA. It is marvellous.

[Mr Hayes]

It is often my experience—you are the personification of this, Mr Walker—that people of great insight are often people of great generosity. My hon. Friend has illustrated that in his contribution so far and exemplifies it in his generous remarks a moment ago.

We will need to do a significant amount of work in respect of skills. I began to take an interest in the number of people who will be associated with this nuclear development and the skills required in my previous job as Minister for Further Education, Skills and Lifelong Learning. I hosted a meeting with the industry to begin to quantify the skills needed and the infrastructure that we would need to put in place to meet that need.

In talking about community benefit, we need to speak about the chance that this development offers us to invest in the local community through the provision of a range of jobs at all skills levels. We have to get that right, and we must not in any sense do so out of sync with other considerations.

[Mr Hayes]

I miss my colleagues at BIS. I miss the Minister for Universities and Science, my right hon. Friend the Member for Havant (Mr Willetts), although happily I visited him briefly at BIS yesterday. Let me assure the hon. Lady that I have discussed this matter specifically with my successor. It may necessitate a new initiative, bringing together BIS and my Department in a way that allows us to continue to explore where the provision will come from to meet the skills needs. It is a further education and a higher education challenge. We need to ensure that that work is co-ordinated across the two Departments, precisely as the hon. Lady describes. In initial discussions, I suggested to my right hon. Friend that he and I, and others, should combine to ensure coherence and consistency across the Government.

[Mr Liddell-Grainger]

May I put a little icing on the cake in respect of the question of the hon. Member for Liverpool, Wavertree (Luciana Berger)? The previous Secretary of State for Energy opened the nuclear skills academy at Bridgwater college in my constituency. EDF is also building a large conference facility there, with auxiliary opportunities, and West Somerset community college has built a huge skills department. My hon. Friend the Minister is aware of those examples; I am trying to jog his memory about all the things that have been going on. More importantly, we are now considering other tertiary colleges throughout the UK, as he is aware, to provide other nuclear skills training. I need to check this personally—it is my problem and no one else’s—but I believe that the university of Manchester is leading a lot of the work.

[Mr Hayes]

The meeting that I chaired at the Cabinet Office to consider these matters, which I have mentioned, was with the nuclear skills academy. We agreed at that meeting that it would act as the conduit by which the skills that the industry needed were articulated and through which the mechanisms needed to meet them through the provision of money were organised. That is at the heart of the process. I commit to ensuring that that is pursued with appropriate diligence.

The Government’s strategy for growth that I described necessitates our seeing the bigger picture in respect of the benefits that communities might get in terms of learning, skills and jobs. In the previous debate, I outlined the significant rewards for communities in such areas. That is sustainable economic growth, some of which lies beyond the confines of section 106 agreements. My hon. Friend made the sound point that it is not enough to rely on section 106 in that respect because we are now talking about a much broader range of challenges—intergenerational, actually, as well as anything else.

The purpose of section 106 agreements is to mitigate the effect on local communities and to compensate for disruption, but they are not, as my hon. Friend rightly said, the ideal vehicle for dealing with developments that host infrastructure for national benefit over such a long period. We need to work with local communities to consider the broader challenges associated with such infrastructural development.

Locally, public support for new nuclear power stations is typically high, and as my hon. Friend said, people in his area have lived with nuclear power for a long time. He mentioned some who recalled the original nuclear build. We must, however, now change our assumptions about the character of such buy-in and engagement. As the new Minister, I am determined to think afresh about how communities can take a degree of perceived ownership of such projects. That does not, by the way, apply only to nuclear power but to infrastructural investment across the board in my area.

There is also a broader point to do with infrastructure investment more generally, but I will not comment on that because I never step too far beyond my ministerial brief. In energy certainly, for a while now the idea abroad has been that things are imposed, rather than people feeling the sense of ownership that my hon. Friend described. That is one reason why we have called for evidence on onshore wind, where that sense of imposition is widely felt.

We have asked people to make the case for community benefit—for the best way to ensure that communities feel that sense of ownership—and for how we can make further progress in ensuring that the vital say of local people helps to direct policy. The same case might be made for other forms of generation as well. We are not discussing only a rejuvenation of existing policy and certainly not a mere restatement of the status quo. This is a chance to create a new paradigm on community benefit, and that is what we shall do.

We have consulted extensively with local communities in all the sites that have been identified as suitable for hosting new nuclear power stations, with frequent visits and stakeholder meetings. Indeed, I insisted on engagement with the non-governmental organisations and met them yesterday. I had a fruitful and lengthy discussion with a range of NGOs in the area of nuclear, and I made the commitment that we will work on the basis of extensive consultation. I hope that we have a productive dialogue; although we will not always agree, it is important to respect opinions and to respond to fresh ideas.

Through such discussions, those large projects will bring national and local benefits, as well as a large number of jobs in both the construction and operational phases. Where communities are being asked to host large infrastructural projects that, although contributing significantly to national energy production and growth, will affect the local area, section 106 agreements need to be targeted effectively. I have said that such agreements are not enough alone, but they should not be disregarded. I want to say rather more about the agreements before I move on to what we will do beyond them.

Typically, a new nuclear power station will take up to 10 years to construct, as part of one of the largest infrastructure developments planned for the UK. There will be 60 years of operation, and current policy requires the building of an interim nuclear radioactive waste facility that can be safely operated for at least 100 years before the waste is moved into a planned geological disposal facility. The work force will be 5,600 at the height of construction, and there will be heavy traffic and associated noise.

I will take this opportunity to say a word about waste, which has also been mentioned in the debate, because there is a similar argument about disposal. There are ongoing discussions with a number of localities about the disposal of waste. Again, community engagement and community benefit are important, as is the process by which people can make decisions on such matters, and of course there must be appropriate consideration of the geological effects of any decisions. The new paradigm that I describe must include consideration of disposal, as well as new build, and we will ensure that that happens.

The recent agreement between EDF and the local authority under section 106 involved almost £100 million, which is a huge sum of money that will be spent in a way that benefits the communities affected by construction, including up to £8.5 million for housing funds; £12.8 million to a community fund for measures to enhance the quality of life in local communities; almost £16 million on highway improvement schemes; and more than £7.1 million to improve local skills and training, among other initiatives.

On previous occasions, my hon. Friend has referred to business rates retention, about which he feels strongly. I understand that there is some confusion on the subject, and I shall attempt to untangle the misconceptions in my few remarks today. Business rates will be retained by local authorities that host nuclear power stations in the same way as growth in other sectors is retained. From April next year, local government as a whole will keep a share of the business rates collected, together with the growth on that share. The Government are currently considering responses to a technical consultation on the final design of the scheme, but it will provide a major boost for those authorities that grow their business rates revenues. A safety net will be available to provide support to those authorities whose business rates income falls below a certain percentage, and that will be funded within the system by a levy on those authorities that receive disproportionate benefit from growth in business rates.

Retention will mean a significant income for the local authority, but it will not mean that local authorities keep all the business rates. It is not, therefore, part of any proposed community benefit package, but only an effect of the huge increase of business rates to the area as a result of the operation of the power station. That is the confusion: people thought that retention was the community benefit package, but it is not, and the community benefit package will exist outside and beyond that. The business rates advantage that I describe will not last for ever—for a maximum of 10 years—and, as I said, that is neither long enough nor goes far enough to support local communities, so it would be an inappropriate vehicle given the scale of investment and the time scale discussed.

In the previous debate, my hon. Friend made the point that business rates would only be retained by the local authority that hosted the site—in the case of Hinkley that would be West Somerset—but I am delighted that, in the spirit of localism, the Government’s proposals for business rates retention also invited local authorities to work together to pool their business rates income, including growth from new development. That is a specific response to the representations of my hon. Friend and others. Today, he amplified that need to take a pan-authority view, rather than to get undesirable tensions between different local authorities as an unintended consequence of policy. I hope that he welcomes that further development.

Guidance was set out earlier this year in the Department for Communities and Local Government document, “Business rates retention scheme: Pooling Prospectus”. Local authorities have been invited to work together voluntarily to develop proposals allowing a number of authorities in an area to come together to share the benefits and risks of business rates retention. Pooling business rates would provide a new tool to deliver what is needed to promote growth and jobs, allowing investment decisions to support economic priorities. It would encourage collaborative working among local authorities, exactly as my hon. Friend described, rather than constraining such activity within administrative boundaries. It would allow the benefit from investment in economic growth to be shared throughout a wider area, potentially providing a growth dividend to pool partners. Pooling would also help local authorities to manage volatility in income by sharing fluctuations across budgets.

A combination of section 106 agreements and business rate retention will provide significant opportunities for local communities, but as I have said, they will not be sufficient on their own.

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[Mr Liddell-Grainger]

Thank you, Mr Walker. I was not intending to, but I will, now that I have been given the chance. I thank my hon. Friend the Minister immensely, and also the Opposition spokesman, for really bringing together what is a very complicated area. I am also delighted that the Economic Secretary to the Treasury has come through by text to say that they will meet. That will give enormous reassurance to my district councils and my county council. However, I also gently say to my hon. Friend that we can set a long-term goal of benefiting local communities not only for Hinkley Point but for many other infrastructure projects. Such huge projects are, by and large, as he suggested, very welcome, and we just want to know that we are being listened to. My hon. Friend is listening and taking forward absolutely the right ideas, and we look forward to welcoming him down in West Somerset, Sedgemoor and the county of Somerset. I thank both Front Benchers again, but especially my hon. Friend the Minister.

Question put and agreed to.