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New Nuclear Power Stations

Volume 545: debated on Thursday 17 May 2012

5. What discussions he has had with the Secretary of State for Communities and Local Government on the potential long-term community benefits of the Hinkley Point C nuclear power station and other major infrastructure projects. (107614)

I have regular discussions with other Government Departments, including the Department for Communities and Local Government, on how to ensure that local communities hosting new nuclear power stations benefit in the long term from these large and nationally important projects. The Government will announce our conclusions shortly.

Thank you very much, indeed, Sir.

The Minister will know of my concerns about the long-term impacts of both the Hinkley Point project and the National Grid’s proposals to put pylons across the Somerset Levels, when we would naturally prefer that it was done underground. Has the Minister had distinct discussions about the crucial importance of business rate retention for the benefit of the local communities? Will he meet me and representatives from local authorities in my area to discuss this further?

The humour arose because I inadvertently sat on the Secretary of State, which shows our commitment to work seamlessly together in this coalition! My hon. Friend makes an important point. We recognise that EDF has already committed about £90 million for a section 106 agreement, but we recognise, too, the need for greater signals for the long-term benefit of the community from those who deliver nationally important projects.

I will endeavour not to sit accidentally on either of my Front-Bench colleagues this morning. One of the claimed community benefits of Hinkley Point is the ability to create and maintain highly skilled jobs. Will the Minister give his reaction to the comments of Citigroup in response to the reports of construction costs at Hinkley increasing by 40%, suggesting that an already very challenging programme might be reaching the point of impossibility?

The hon. Gentleman nearly did sit on his right hon. Friend the Member for Don Valley (Caroline Flint). He makes an important point. We are in close conversations with EDF and other potential developers of nuclear plants and we recognise that they have to be delivered in a cost-efficient way. We do not recognise the figures in the Citibank report, but we will continue to work with the company to ensure that this low-cost, large-scale, low-carbon source of generation can be part of the future energy mix.

I am grateful to the Minister for that response. I am sure he will also be aware of the evidence that Volker Beckers, the chief executive of RWE npower, gave to the Energy and Climate Change Committee earlier this week. He explained that the company was pulling out of the Horizon joint venture because continuing

“would have meant a downgrading and we could not afford to do that”.

Given the report from Moody’s suggesting that if EDF were to continue with Hinkley and, indeed, Sizewell, it would be at risk of having its credit rating downgraded, how concerned is the Minister about the prospects for nuclear new build in the UK?

The hon. Gentleman provides a partial quote, in that Volker Beckers also said that this was a result of German Government policy and of the constrained balance sheets that resulted from the nuclear levy in Germany, and that RWE is selling off £7 billion-worth of assets worldwide, making a further €2 billion-worth of cost reductions elsewhere. Essentially, this is part of a global restructuring of the company. We continue to believe that the measures we are putting in place through market reform—more detail will be published very shortly—will create the right environment for investment in our low-carbon infrastructure for the future, which is so critical for our energy security.

Does my hon. Friend agree, however, that there is no prospect of a new nuclear power station at Hinkley Point or anywhere else in the UK until we have absolute clarity about the contracts for difference regime? That clarity must extend to the credit status of the counter-party, compliance with the EU state aid regime and the setting of the strike price. Will the Minister tell us when we will have that clarity?

I can give my hon. Friend the assurance that the clarity he seeks will be published very shortly, within the next few days. When we publish the Bill, we will publish a further technical update, which will provide much of the information for which he asks. We have been very keen that the Bill goes through the process of pre-legislative scrutiny, so that his Committee, the Opposition Front-Bench team and others can contribute actively to it.