Infrastructure Projects (Community Benefit)

Luciana Berger Excerpts

Thursday 18th October 2012 Westminster Hall

[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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[Luciana Berger]

I thank the hon. Gentleman for that clarification.

There will obviously be a knock-on effect, with increased traffic and noise disruption. There will also be a much longer-term effect as the station is likely to be operational for 60 years, and the waste generated at the site is likely to be stored locally for up to 100 years.

On the precedent for energy infrastructure, the Government have previously supported community benefits for areas housing onshore wind energy generation. I believe I am right to say that they are moving towards a similar principle for waste energy. So there is a case for some community benefits beyond those afforded under section 106, to which the hon. Gentleman referred, and beyond the direct benefits that will come from more long-term employment and greater spending in the local economy.

As I said earlier, it is up to the Government to come forward with a suitable package and an announcement on a new regime to give more certainty to the communities that will be home to those new developments. In fact, the Minister committed to delivering local community benefits as part of the Hinkley Point C project during the 18 September Adjournment debate on this subject secured by the hon. Gentleman. The Minister said

“if the scheme is to be delivered, we must address the issues of community interest and values that my hon. Friend”—

the hon. Member for Bridgwater and West Somerset—

“raised. It is my desire—no, it is my mission—that that is delivered. We must turn these plans into action.”—[Official Report, 18 September 2012; Vol. 550, c. 895.]

I welcome that sentiment, previously expressed by the Minister, to get moving on infrastructure projects. I only wish that that desire was shared by more of his colleagues.

It would be remiss of me not to make a point more generally about the Government’s infrastructure policy. It is distressing that they currently have a poor record of getting desperately needed infrastructure projects off the ground. We have had plenty of announcements and promises of extra funds. We have seen lots of press releases and pictures of Ministers in hard hats, all designed to create the impression of activity. They distract from their failure to deliver a one-nation plan for jobs and growth. We have seen few results.

The 2011 national infrastructure plan identified 40 priority infrastructure investments that the Government said were of national significance and critical for growth, but many of those have not been started. A comparison of the construction section of the Government’s November 2011 infrastructure pipeline with the update published in April 2012 shows that no progress has been made on 171 of the projects—three quarters—while progress has actually gone backwards on 36.

[Andrew Jones]

I thought the hon. Lady did marvellously well to say, “One-nation infrastructure plan” with only a momentary glimmer of a snigger. Will she join me in at least recognising and congratulating the Government on the step change in their approach to rail electrification, a key part of our infrastructure, noting the difference between 9 miles in the previous 13 years and 850 miles so far under this Government? Surely that is worthy of support?

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[Luciana Berger]

I thank the hon. Gentleman for his intervention. I, myself, was not sniggering. On his substantive point, I refer again to the Government’s own figures. We can look at isolated projects where there might have been some progress—I am obviously very keen, as a north-west MP, to see that sort of development on my local railways—but I refer again to the figures: three quarters of the projects have stalled and 36 have gone backwards. We cannot look at one project in isolation; we need to look at the whole picture.

[Andrew Jones]

rose—

[Luciana Berger]

I will continue, if that is okay.

Even for the projects that are on schedule, many are not due to begin construction for months or even years. Almost a year later, business is still asking, “Where are the diggers on the ground?” We all agree that we need infrastructure investment, but where is the delivery promised time and time again by this Government? A recent industry survey found that 60% of respondents claimed that a

“lack of clarity from the government”—

was the factor that most discouraged investors from investing in large-scale infrastructure projects here in the UK. Therefore, the lack of clarity on measures such as community benefit needs to be addressed urgently.

In conclusion, I hope that the Minister will be able to give us details about plans for a community benefit package for Hinkley Point. Will he also confirm whether the package will include the retention of business rates? Will similar arrangements be made available for future new-build nuclear projects? As I mentioned previously, this is not about a project in isolation but about the whole issue of community benefit. I urge the Minister to use his remarks to end the uncertainty and to give clarity about community benefit packages, so that renewed focus can be placed on delivering these vital infrastructure projects.

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[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.

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[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.