Hinkley Point

Lord Harrington of Watford Excerpts

Wednesday 14th November 2018 Westminster Hall

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)]

It is, as always, a great pleasure to serve under your very competent chairmanship, Mr Hollobone, as I have many times. I hope that the rest of the debate will not be too stressful for you, given the spirit in which my hon. Friend the Member for Bridgwater and West Somerset (Mr Liddell-Grainger) intends it, for which I thank him. He has consistently and regularly demonstrated a keen interest in the Hinkley Point C project—formally, at the meetings we have had together, and on visits, and more or less every time I have a cup of tea or coffee in his immediate vicinity. I congratulate him on that.

I also congratulate the other hon. Members who contributed to the debate: my hon. Friend the Member for North Devon (Peter Heaton-Jones), the hon. Member for Ynys Môn (Albert Owen)—it took some time to learn that constituency, but I think I know it now—and, of course, the ubiquitous hon. Member for Strangford (Jim Shannon).

My hon. Friend the Member for Wells (James Heappey), who is also a regular contributor, taught me something that conditioned my view of Hinkley Point and other projects when I had just taken on the portfolio. He told me about his fear that the local content would comprise, basically, a sandwich van at the end of the site. I say that because my hon. Friend for Bridgwater and West Somerset talked about wet bottoms.

[Mr Liddell-Grainger]

Soggy bottoms.

[Richard Harrington]

I shall have to check Hansard. I appreciate your leniency, Mr Hollobone—I am sure Mr Speaker might have thought that was unparliamentary language, but it was not intended to be so.

The serious point I am making is that in all my dealings with EDF, and in all my visits down there and visits to suppliers, I am always keen to stress the point made by my hon. Friend the Member for Wells about the local supply chain, and the fact that these are real jobs. That reflects the points made about the national impact, which we always have to think about.

I am proud to be part of this Government and I asked for the nuclear portfolio—not because it was part of my general energy portfolio, but because I believe it is a brilliant industry in its own right for the future. It has everything that we look for in our industrial strategy: quite apart from the energy side, the industry creates good-quality, high-level employment, and that energy, if produced in bulk—obviously, not hundreds and hundreds of these, but more than one—can reduce the price by 30%. It also has supply chain and export, and is high tech. Before we even get on to the green point, the baseload point and all the other things that are so important, it has a lot going for it.

That is why I was pleased when the Secretary of State and I went to—I must warn you, Mr Hollobone, that this could be difficult for me to pronounce—Trawsfynydd, in Snowdonia in north Wales, to launch our nuclear sector deal. The hon. Member for Ynys Môn nodded, so I am pleased I got the pronunciation right. It has a great future. We have mentioned different parts of the country today, including north Wales and Wylfa, which are important.

Indeed, the hon. Gentleman and I have discussed community benefits for Anglesey. Obviously, the community benefits for Hinkley Point are further down the line because the development is well under way. Those are important community benefits and it is right that those decisions should be made locally. Of course, that can lead the Government into lots of problems, because local communities do not have a consistent view, depending on area.

[Albert Owen]

The question I raised regarding the announcement made in 2013 by the then Department of Energy and Climate Change still stands, and I know that the communities of Bridgwater and of Anglesey are concerned that nothing much has happened since then. Will the Minister reiterate his commitment to that formula so that the Ministry of Housing, Communities and Local Government and the Welsh Government can work with his Department, the mechanism can be put in place and, when the stations are generating, the communities can get the full benefits?

[Richard Harrington]

I am happy to confirm that. I have already met with one chief executive and one lead councillor from the hon. Gentleman’s area, but I would, of course, be delighted to discuss this with him at any time.

The main point today, which my hon. Friend the Member for Bridgwater and West Somerset expressed so eloquently, is how important the nuclear industry is as an industry in its own right to local economies and to the national economy. As far as I can see, EDF is doing an excellent job. There are many British and Northern Irish employees, some of whom I met down there, of different skill levels, and I was pleased to see the number of young girl apprentices, which is also part of our nuclear sector deal.

I am not at all complacent. I think the deal struck at Hinkley Point C was sensible from the taxpayer’s point of view, as my hon. Friend mentioned, because it completely de-risked the taxpayer. We can do other interesting deals in the future for nuclear. At the moment, nuclear power is roughly 22% to 24% of the power output that we need. By 2030 to 2040, as the original power stations are decommissioned or reach the end of their life, that will drop with Hinkley to—again, these are very rough numbers—5% to 7%. There is a big gap.

[Sir Michael Fallon (Sevenoaks) (Con)]

Does the Minister agree that the true value—that might have been a better title than “cost”—of the Hinkley project will not be known until we see some of the cost savings that will be realised at the second station that EDF has built, and indeed in the sequencing of stations that will be built after that?

[Richard Harrington]

My right hon. Friend makes an excellent point, with which I fully agree. On my first visit to Sellafield I was shown the original Calder Hall reactors that were opened in the ’60s. The then Minister said that the electricity would be so cheap that it was not even worth metering it. We have moved away from that, but I believe that, in the long term, this will be low-cost power. As everyone knows, the up-front costs are significant. After that, the marginal costs are comparatively low. As long as there is a reasonable way to finance the up-front costs—which, as the technology becomes more modular and more commoditised, we will be able to estimate more accurately—I totally agree with my right hon. Friend’s point.

I am pleased to respond to today’s debate. I will not forget Hinkley Point C, which is one of the most significant visits I have ever made. It is calculated that 64% of the construction contracts there—it is a huge project—will go to UK companies, and that £4 billion will go into the regional economy over the lifetime of the project. We will not forget that; it is very important to us. I am extremely grateful to my hon. Friend the Member for Bridgwater and West Somerset for bringing the debate to the Chamber.

Question put and agreed to.