Local Government Finance Bill

Lord Jenkin of Roding Excerpts

Wednesday 10th October 2012 Lords Chamber

Moved by

[Lord Jenkin of Roding]

70: Schedule 1, page 46, line 8, at end insert—
“( ) Without prejudice to the generality of this paragraph, the regulations may provide that a designated class may include a hereditament which consists of an investment to provide electricity generation from a renewable or other low carbon source, including nuclear power.”

[Lord Jenkin of Roding]

My Lords, I assure your Lordships that this will be a considerably shorter speech than the last one that I made but of no less importance. I will start, if I may, by quoting a letter that was written to local authorities in the Somerset area, which is of course hosting the Hinkley point nuclear power stations. The letter was written from the Cabinet Office and signed by my right honourable friend Oliver Letwin. It draws attention to the coalition’s agreement in the programme that they embarked on in 2010.

The letter says that it set out a commitment to,

“encourage community-owned renewable energy schemes where local people benefit from the power produced. We will also”—

these are the important words—

“allow communities that host renewable energy projects to keep the additional business rates they generate”.

The letter goes on:

“While this commitment did not extend to all low-carbon technologies, the design of the business rates retention proposals will ensure that there will be significant ongoing benefits to those authorities hosting low-carbon energy infrastructure. It is likely that nuclear power stations will generate significant increases in business rates revenues in line with scale of the programme”.

The nuclear industry has been campaigning for some time that benefits that apparently were offered to renewable technologies should have been offered to it as well, and that the communities that host these very major investments should see some direct benefit from doing so. This was followed up by a debate in another place by the honourable Member for Bridgwater and West Somerset, my honourable friend Ian Liddell-Grainger, on 18 September, the last day before the conference recess, which was answered by the Minister of State for Energy at the Department of Energy and Climate Change, my honourable friend John Hayes. This whole concept was examined in some detail and a comparison was made with the Section 106 agreements under planning legislation. The point was made that they did not go far enough. Although there have now been substantial agreements with the developer on Hinkley Point under Section 106, it was felt that something more was necessary. Mr Hayes said:

“I can assure my hon. Friend that I will draw the matter into sharp focus, and we will indeed deal with it in the short term. My officials have been working on a number of ways, including business rates retention, in which a community benefit package could be delivered”.—[Official Report, Commons, 18/9/12; cols. 897-98.]

I have two points to make to my noble friend. First, am I right in assuming that Part 10 of Schedule 1, “Designation of areas and classes of hereditament”, will be the legislative measure under which regulations could be made, both for renewables and for nuclear power stations? I would be glad if my noble friend could assure me of that.

Secondly, will she assure me that her department is now fully behind the proposal that this should be done for nuclear power stations? I know that the Department of Energy and Climate Change is and, as we have heard, the Cabinet Office has clearly expressed a strong argument in favour. I hope that my noble friend can say that this is now government policy and that, when the regulations come to be made under Part 10 of Schedule 1, they will in fact cover nuclear power stations. I beg to move.

--- Later in debate ---

[Baroness Hanham]

I will write and confirm to the noble Lord. I am pretty well convinced that it does, but I will confirm it.

[Lord Jenkin of Roding]

My Lords, I am extremely grateful to my noble friend for her assurances. I certainly take heart from them. On the question asked by the noble Lord, Lord McKenzie, as I think I said, Mr Letwin’s letter said:

“While this commitment did not extend to all low-carbon technologies, the design of the business rates retention proposals”—

I think that is what we are talking about, and I am grateful for the confirmation that paragraph 38 is appropriate—

“will ensure that there will be significant ongoing benefits to those authorities hosting low carbon energy infrastructure. It is likely that nuclear power stations will generate significant increases in business rates revenues in line with the scale of the programme”.

I think it was a perfectly fair question, and I hope we will all get a copy of the answer that will be sent to the noble Lord, Lord McKenzie of Luton. In the mean time, I am happy to withdraw the amendment.

Amendment 70 withdrawn.