Infrastructure Projects (Community Benefit)

John Hayes 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.

--- Later in debate ---

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

It is a delight to serve under your chairmanship, Mr Walker. It would have been in any case, but particularly so given your recent elevation, which has been referred to already, to the chairmanship of the Procedure Committee. It is also a delight to speak in a debate led by my hon. Friend the Member for Bridgwater and West Somerset (Mr Liddell-Grainger), and I congratulate him on securing it. His assiduity in making the case on behalf of his constituents has almost reached the point of relentlessness. So much so that, in the short time that I have been a Minister in this role, I have spent a good deal of it working with him in the interests of the people whom he represents so well. It is delightful also to speak opposite the hon. Member for Liverpool, Wavertree (Luciana Berger), and I look forward to doing so many times. I think that it was Disraeli who said that the greatest education is adversity. I hope she learns as much as possible from the adversity of opposition.

The proposals for a community benefits package for nuclear build, as has been said by a number of hon. Members, including my hon. Friend the Member for Bridgwater and West Somerset, need to be seen in the context both of the Government’s approach to energy policy more generally and, as the hon. Lady said, the Government’s approach to infrastructure investment more generally. In doing so, one has to mark, as I did earlier in the House, the fact that was mentioned by my hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones). Given ideal circumstances, we would not be starting from here.

The need to invest in energy infrastructure has been as plain as the nose on your face, if I can put it in those terms, Mr Walker, for a considerable time. We have known that our nuclear build, largely predating 1985 when the last build was made—most of our nuclear infrastructure was built in the ’60s and ’70s—was ageing. We knew that coal was coming to an end, because of that important commitment to emissions, and that much of our gas infrastructure was reaching the end of its life. The decisions to make new investments in nuclear and other energy infrastructure could have been made—I hesitate to be too partisan, but should have been made—a long time ago.

In a curious way, that is very exciting for me. What it means is that I can now make those decisions in my new job, and can do so under landmark legislation, namely the Energy Bill, which, as hon. Members know, we plan to introduce to Parliament before the end of the year. In doing so, it is important to take into account not only the importance of attracting sufficient investment to make that a reality, but three other points that I want to highlight at the outset.

First is the need to assure all those concerned of a high level of cross-party agreement about these matters. When things are in the national interest, there is a proud tradition in the House of parties coming together. There are many examples, but I will not tediously list them. There can be no better case than this of something that is clearly, palpably, in the national interest, not least because the decisions made now will bind future Ministers, future Governments and future policy. By their nature, these are fundamental decisions of a scale that has been mentioned already, and will have an effect for many decades. Nuclear build takes something of the order of 10 years, once the investment is put in place in the first place, and then has a life, judging from international experience and our own experience here, of approximately 50 or 60 years. We are therefore making decisions over an immense time scale at an incredible scale. I hope that we can build consensus around policy. I was delighted with the tone and content of the remarks made by the hon. Lady in those terms.

We need a new paradigm with regard to effect—the way that this affects communities and the way that people who live near the location of that kind of infrastructural investment and will be directly impacted by it, feel a sense of ownership, a sense of buy-in, of those developments. Historically, we have not always got that right, but these things are iterative and we learn by our experience. It is very important, as we put this strategy together, to engage in new thinking about the character of community benefit. That is why—not just because of his local interest in these matters, but because of their national significance—my hon. Friend the Member for Bridgwater and West Somerset is doing such a service to the House in repeatedly making the case for a new approach to community benefit. I hope, in the few moments available to me, to be able to do that this afternoon, and to do so with this initial commitment. This needs to be done urgently, because, of course, anxieties and concerns are bound to take root without the clarity that both my hon. Friend and the hon. Lady have called for. We need to do this speedily and make it crystal clear, and I personally commit myself to doing that.

As my hon. Friend said, I plan to meet community leaders from his locality. He has generously invited me to Bridgwater, and since then one or two details of that visit have been cemented. He has a lavish reception planned for me; it is almost a state visit that he has in mind. He tends never to underplay these things. That will be an opportunity for me to have meaningful discussions with the people whom he represents that will focus on economic growth, skills and jobs, and on the other benefits that the community might reasonably anticipate, given the scale of the investment that we are speaking of.

As I said during the previous Adjournment debate last month, I wholeheartedly agree that challenges arise for communities hosting new nuclear power stations. Those challenges are not straightforward or easy to deal with; they are significant. However—my hon. Friend was frank about this, as was the hon. Lady—we are convinced about the need for new nuclear power stations. The advantages of nuclear, which I will not describe again in excessive detail, are well established and, in part, relate to their advantage in respect of emissions. Investing in nuclear power is an effective way to help us to meet our 2050 emissions targets. More than that, it helps us create a new opportunity in respect of skills and jobs for the United Kingdom that will reduce our dependence on imported gas, for example, as domestic gas gradually becomes a smaller proportion of the means by which we fulfil our demands.

There is no change in approach in respect of nuclear as a priority. Indeed, I am probably the most pro-nuclear Minister who has ever occupied this job, and that is not to underestimate my predecessors in any sense. I am enthusiastic about the prospect of building new nuclear power stations and putting them at the heart of our energy strategy.

The planned nuclear development at Hinkley Point will, as my hon. Friend suggested, provide 6% of the UK’s electricity, powering some 5 million homes. It is an extraordinary project in terms of scale. The new nuclear programme will also substantially contribute to the Government’s growth strategy, by creating significant numbers of jobs throughout the UK.

Another aspect of getting this right is ensuring that we get the supply chain strategy right. Community benefit and the supply chain are not the same thing, but there is an overlap and, of course, there are parallel considerations in terms of significance and time scale. We must ensure that, wherever possible—I send this signal out strongly—these are local jobs and local skills, including those relating to the construction and running of the plant and all the work done thereafter, including, of course, the disposal of waste and so on. We must encourage local economic activity in the vicinity of the new plant and enhance the social fabric of local communities simultaneously.

[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.

[Luciana Berger]

I have listened carefully to the Minister. I welcome his identifying the need to consider such skills, particularly when the skill set has not been needed for quite a while. What conversations has he had with his colleagues at the Department for Business, Innovation and Skills about what investment may or may not be going into our universities? I understand that the nuclear departments of universities are depleted or not in the state that they should be in.

[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.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

I apologise to the Minister and hon. Members for being late. I had forgotten about the switch to a 1.30 start in Westminster Hall.

One comment from the Minister is very welcome. Ongoing business rates means that there will be investment in skills and other opportunities throughout the plant’s lifetime, not just its initial commissioning. The focus on the pooling of rates is very welcome.

[Mr Hayes]

I described the assiduity of my hon. Friend the Member for Bridgwater and West Somerset in representing his constituents, and perhaps it is matched by that of my hon. Friend the Member for Suffolk Coastal (Dr Coffey), who has spoken to me repeatedly and at great length about the interests of her constituents. She hosts an existing nuclear power plant. I am grateful for her acknowledgement of the progress that is being made. I have never been an excessive stickler for punctuality, which I always think is the preoccupation of very small minds and people who do not have much to do.

A community benefit package should indeed go well beyond section 106 agreements. The sum of money is large, but community benefits must be more than that. The national infrastructure plan, which was published in 2011, committed the Government, as the hon. Member for Liverpool, Wavertree said, to introducing proposals by the end of the year for reform of the community benefit regime. Since the last debate, I have done a lot of work on this in a number of ways, as have my wonderful officials. We have looked at a range of means by which a community benefit package might be delivered, and we are close to a conclusion. The hon. Lady will be pleased about that because, charmingly and with appropriate diligence, she pressed me on the timetable.

I am pleased to say that we have made progress in considering the options. We are considering how a community benefit package can best be delivered in the interests of local people in line with the principles that it should be meaningful for the community, be spent by the community, be fair and equitable across different sites, and have a long-term impact.

The focus of a community benefit package is on planning and investment for the time after the construction period, enabling long-term, sustainable growth by redeploying labour and creating new business opportunities. That will help to ease the transition between the fluctuating employment levels during construction, and the more stable and sustained employment levels associated with operation of the plant. That is important in relation to what we described earlier: skills and jobs. Many of the skills required in the construction phase will be transferable by their very nature, and quite different from the skills required during operation. What we would not want to do is to create opportunities for local people to acquire skills and to get jobs without thinking through how those skills and jobs might be dispersed over time. That is a significant challenge, but not one that we should duck. We need to think that through in terms of the benefits package that we devise and implement.

Another element on which I have placed particular emphasis in our discussion is the effect on people who will not directly benefit from the project in the ways I mentioned. A range of issues, including better transport, better community facilities, and so on, need to extend well beyond the immediate economic benefit that one might expect during construction and operation.

In line with the principles of localism—a subject dear to my heart—people in the community should determine what is needed and what will best serve their community. That is part of the paradigm I described. My Department has constituted a Hinkley strategic development forum in Somerset, as my hon. Friend the Member for Bridgwater and West Somerset knows. It comprises representatives from central Government, local authorities, the local enterprise partnership, the Chamber of Commerce and EDF to maximise local benefits from the development that is about to happen. That forum has just had its second meeting, and feedback has been extremely positive. The format seems to have been welcomed by the local community.

Such forums could be a suitable vehicle to help people with advice on the use of a community benefit package. Local authorities are involved in those forums, but there is an argument for involving other agencies in that way with the support of local authorities. We believe that all the district councils are working constructively to ensure that the whole area benefits from the development of Hinkley Point C. We see no reason why that would change if there were a community benefit package. Local authorities have the power to form partnerships to make that a reality for the long term.

We are clear that every package will have a particularity that reflects the circumstances of the area in which development takes place. Early this week I spoke on the Isle of Wight, which was wonderful, as you can imagine, Mr Walker—I am thinking not of my speech, but of the Isle of Wight, although both were wonderful—and I made the point that a developed capitalist economy tends to lead to the deadening effect of dull ubiquity. I want the packages to be characterised not by dull ubiquity but by the exciting particularity that is guaranteed by the strong involvement and shaping of them by local communities. They must be meaningful and provide some of the things I mentioned earlier: long-term economic stability for the area and recognition that the community is hosting infrastructure of national significance.

To pick up my hon. Friend’s point, packages should not be just an income boost for a single local authority. That would be quite wrong and counter-productive. Any community benefit package must be large enough to make a difference in the short term and have an immediate effect while promoting sustainable growth over a considerable time. Discussions have been going on for some time to put together proposals for a community benefit package that meets all the criteria of being meaningful, making a difference, managing to achieve a sustainable local economy, and having a lasting impact for generations with the aim of engaging the local community in the long term.

I will introduce proposals within the timetable agreed. I will do so to the House in the form of a statement, and I will of course ensure that my hon. Friend and the communities affected are informed. As a result of the representations that have been made in this debate, I have decided to write to all local authorities concerned and to ensure that there is an ongoing dialogue there as the proposals are made.

I recognise the point that the hon. Lady made that uncertainty is unhelpful. In any strategy, certainty is a prerequisite of confidence and there will not be commercial investment or social and cultural investment—investment of belief—among local communities unless we are very clear about our objectives and how we will meet them. I can tell the House that as a result of our debate, I have decided to meet the Economic Secretary to the Treasury today, with the aim of coming to an agreement shortly on the total value of the package. He will receive a text message from my Parliamentary Private Secretary and, knowing the diligence of the Economic Secretary, I am sure that he will be waiting for me when we finish the debate.

Progress has been made over the last few weeks and more detail will follow shortly. We are clear that communities deserve recognition and clarity on what that recognition will mean for them. As I have said, it will give me immense pleasure to provide that clarity in the very near future.

In conclusion—I know that there will be some disappointment that I am drawing my remarks to a close so speedily—much of the misunderstanding, or absence of understanding, around energy policy springs from the past excessive emphasis on cause, and the inadequate consideration of effect. We have talked too much about production and not enough about consumption, and there has been too much about supply and not enough about demand when discussing energy strategy. Part of the new approach that I have outlined is to put fresh emphasis on effect and on demand.

[Luciana Berger]

Will the Minister give way?

[Mr Hayes]

I am delighted to, even at this very late stage.

[Luciana Berger]

I have listened closely to the points that the Minister has made. Will we see in the forthcoming Bill dealing with electricity market reform, measures on demand reduction? As he will know, the Opposition raised serious concerns that the draft Bill contained nothing on demand reduction. Having listened to his contribution, I wonder whether what he has said will translate into a change in the Bill when it is introduced.

[Mr Hayes]

The hon. Lady makes a very good point, which was also made by the Select Committee on Energy and Climate Change when it scrutinised the draft Bill. We are in discussions on that issue, and the Department is drawing up that Bill, as she knows. The Secretary of State and I are both clear that demand reduction needs to be given greater emphasis. The hon. Lady, however, would not expect me to anticipate what will be in the Bill. It would certainly be inappropriate, and possibly even worse procedurally, to do so, Mr Walker. However, she can have my absolute assurance that demand reduction will be given an emphasis that it has not had previously. We have listened closely to the representations of the Select Committee and others, as well as the Opposition. Governments can learn from Oppositions—never quite as much as Oppositions can learn from Governments, but none the less, she has made a powerful point to which we will give further consideration.

To conclude the debate, we may shortly be in a position to clarify the community benefits package that my hon. Friend the Member for Bridgwater and West Somerset seeks with such vehemence, to articulate a new paradigm for dealing with major infrastructural investments in the area of energy, and to redress the balance in terms of the debate between supply and demand, and production and consumption. If so, I will then be able to live up to the description that has been made of me, as the people’s Minister for Energy.

[Mr Charles Walker (in the Chair)]

Mr Liddell-Grainger, would you like to use your two minutes to respond to the debate?