House of Commons
Monday 21 October 2013
The House met at half-past Two o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
Communities and Local Government
The Secretary of State was asked—
For the first time ever, people who are not councillors or planning officers can get involved in drawing up a plan for their community that has full statutory weight. More than 540 communities have been designated as neighbourhood planning areas and a further 210 have applied.
The best defence and the way to guarantee that the local authority representing local people is in the driving seat is for that local authority to get on and complete its local plan. That is sometimes a difficult process, but that is the best thing to do—to get on and complete that local plan.
Does the Minister agree that for far too long under the previous Government planning seemed to be done to communities, rather than by them? Last week I attended and spoke at the public inquiry into the potential development of the Tiffey valley, which South Norfolk district council, with a five-year land supply, is defending. What assurance can my hon. Friend give me that under the Localism Act 2011, which we all supported in this House, councils that have a land supply and are seeking to implement a town plan will receive the Government’s support?
It is true that we have finally, after a certain amount of effort, managed to scrap the regional strategies that the previous Government used to impose entirely unwanted plans on local communities. The best way to ensure that local decisions will be supported and will stick is for local authorities to have a clear plan which sets out how they will meet their objectively assessed needs. That means that they can pick and choose where and how those needs will be met.
Planning guidance about a material change of use from a residential house to a children’s home necessitating a planning application is unclear. Last July, in response to my Adjournment debate, the then Under-Secretary of State, Department for Communities and Local Government, and now the Comptroller of Her Majesty’s Household, the right hon. Member for Bath (Mr Foster), said that he would continue to keep under review the planning guidance in relation to that. Has there been any progress? As the Minister will appreciate, many local people would welcome the opportunity to contribute to a planning application because of the safeguarding issues surrounding children.
In last week’s debate on high streets, my right hon. Friend the Member for Lewisham, Deptford (Dame Joan Ruddock) said that on her high street Nos. 14, 37, 38 to 40, 44, 48 to 50, 52, 60, 70, 72, 93 to 95, 175 and 206 are all betting shops, payday loan outlets or pawnbrokers. Does the Minister honestly think this is what local people want? Will he explain to the residents of Deptford and elsewhere why his Government are making it harder, not easier, for communities to stop such premises taking over their high street and town centre?
Local authorities have a range of powers under planning rules and licensing to restrict the growth of these various uses. However, the hon. Lady must say why the Government whom she supported did more to relax licensing laws to encourage the growth of gambling, and only now in opposition seem to have changed their mind about this business.
Local authorities whose local plans have been found wanting find themselves under siege from opportunistic developers. The result is planning applications in places such as Evercreech which are the reverse of what local people want. Can the Minister say that emerging local plans will have a material impact on planning decisions, and can he make sure that local authorities resubmitting plans get to the top of the list to stop this happening further?
The best way to stop this happening is for local authorities to get their plan right the first time, but if revisions have been made, once the plan has been through the public consultation phase, it does not have a huge number of unresolved objections and it has been submitted to an inspector, it certainly can start gathering weight. The precise position is set out in the revised planning guidance that is currently open for consultation.
Is not the relaxation of planning laws over recent months making matters worse for local communities trying to deal with the growth of payday lenders, bookmakers and unwanted fast food outlets, are not the Government adding to the problem?
3. What steps he is taking to help first-time buyers get on the housing ladder. (900551)
The Government are committed to supporting people’s aspirations to own their own home. In just six months, our Help to Buy scheme has helped over 15,000 households reserve a new home for themselves and their families. The scheme is proving extremely popular with first-time buyers.
May I also take this opportunity to pay tribute to my predecessor, my hon. Friend the Member for Hertford and Stortford (Mr Prisk), for all his hard work, commend him for the gracious way he has handled himself and thank him for his generosity towards me?
I welcome the Minister to his new post. Many critics of Help to Buy point to the possibility of a housing bubble, but they clearly have not visited the north-west, where house prices have fallen over the past year. Why should first-time buyers in Blackpool North and Cleveleys be prevented from getting on the housing ladder because of metropolitan snobbery and petty envy?
I thank my hon. Friend for his question. I agree that at the moment there is a huge media focus on London and the south-east. As a northern MP, I know that if we remove London and the south-east from the national figure of 3.8% for price rises, we get 2.1% for our part of the country, but several other parts have seen no increase at all, so we need to stick up for the Blackpools, Burnleys and Bradfords as well.
The average earnings for my constituents working full time last year were under £23,000, so they know all about why it is right to cap benefits in order that people who work hard are not undermined by those who live off the taxpayer. Meanwhile, the average home in Norwich North sells for around £145,000. Does the Minister agree that Help to Buy can help make the dream of home ownership a reality for those people?
I thank my hon. Friend for her question. Since the housing crash in 2008, many families in her constituency have struggled to get on the housing ladder, and the Help to Buy mortgage guarantee scheme, in particular, helps people like those she has mentioned. The tremendous response that RBS, for instance, has had, with some 10,000 inquiries in the first four working days, demonstrates that the Government are on the side of hard-working people and will support people such as the constituents she mentioned.
I welcome the Minister to his new responsibility. Last week the Communities and Local Government Committee had the Department’s permanent secretary and officials before us. We asked about the impact of the Help to Buy scheme on new house building. They said that the equity share element would add a maximum of 5,000 new homes a year, but they could not give us any assessment at all of the impact of the mortgage guarantee element. Is that because the Government, like everybody else, now believe that the scheme will have a minimal impact on house building but a significant impact on house prices?
I thank the hon. Gentleman for his kind words and look forward to working with the Select Committee. The Government have delivered 334,000 houses so far, 84,000 of which are affordable homes, and put a range of mechanisms in place to deliver houses. That is what is really important to people out there.
23. The Government are absolutely right to help first-time buyers, but of equal importance are those who wish to move up the housing ladder but cannot do so without the first-time buyers entering the market. Does the Minister agree that the second-hand market is therefore as important as the sale of new homes, and what will he do to support it? (900572)
New build is really important, but my hon. Friend is right that we must also stimulate the existing housing market. The mortgage guarantee scheme covers existing housing, so I suggest that he goes out to promote it to residents in his beautiful city of Carlisle.
One of the real problems for first-time buyers is that simply not enough homes are being built to meet demand. In Lewisham, of the 15,000 homes that have been granted planning permission over the past six years, more than 9,000 are yet to be built. Is it not about time that developers were told, “Use it or lose it” when it comes to planning permissions?
Social Enterprises (Funding)
I follow my ministerial colleague in thanking my immediate predecessor, my right hon. Friend the Member for Bath (Mr Foster), for the smooth handover into this post; it is always a good idea to be nice to the Chief Whip.
My Department established the community shares unit in October 2012, with £590,000 of funding over three years. Since then, communities have raised £16 million from 70 share offer launches. That is a significant increase on the £3 million raised the year before.
I welcome the Minister, who was a very good member of the Education Committee under my chairmanship, to his new job. Is he aware that crowdfunding is how we could get a real renaissance of communities up and down the country? It is in peril at the moment because in the private and social enterprise sectors it is threatened by inappropriate regulation from the Financial Conduct Authority.
Mr Speaker, there are many distinguished alumni of that Committee, and I greatly enjoyed my three and a half years under the hon. Gentleman’s chairmanship.
The hon. Gentleman is chair of the Westminster crowdfunding forum. At the moment, the sector is completely unregulated; I am aware that the hon. Gentleman has recently raised concerns in The Sunday Times. If he has specific concerns about the heavy hand of regulation, he should write to me and I shall raise the matter with colleagues at the Treasury, the Department for Business, Innovation and Skills and the Cabinet Office.
The provisions of the Localism Act 2011 have been able to be adopted for the past 12 months, and there have already been more than 1,000 such uses. We continue to promote use of the 2011 Act through local partners and the media. In addition, I am discussing the potential for cross-Government working, combining community rights and volunteering.
A play park in East Looe in my constituency has been identified for possible housing development. It is the only green space in the area where children can play and where wildlife can live. What steps can the residents take under community rights to protect their long established and important local amenity?
My hon. Friend and other coalition colleagues across Cornwall will be pleased to know that Cornwall is a hotspot for use of the 2011 Act. In my first couple of days in office, officials showed me a map revealing that the 2011 Act had been incredibly popular, with more than 50 assets so far having been registered as being of community use. Through local plans across Cornwall itself, or through neighbourhood plans, local communities should be able to identify areas for special protection and use a local neighbourhood plan to attract sufficient homes, jobs and other essential services. My advice to my hon. Friend is that she should perhaps use a neighbourhood plan.
When the Secretary of State visited ex-Ministry of Defence sites in Lincolnshire, he saw first hand the poor state they can be left in when the transfer of community assets is done badly by the MOD. What discussions has the Department for Communities and Local Government had with the Ministry of Defence to ensure that in future there is better transfer of assets, such as those in the Kirton-in-Lindsey area in my constituency, and that we do not have continuing sores in our communities, as has been the case in parts of Lincolnshire as a result of heritage?
I thank the hon. Gentleman for raising that issue; he will understand that I have not been aware of it in my first couple of weeks in office. I understand that the Secretary of State is aware of it and has already corresponded with the Ministry of Defence about it. I am sure that we will be in touch as soon as we hear an answer from ministerial colleagues.
Will the Minister join me in congratulating my parish council in Chalfont St Peter on taking advantage of the Localism Act and producing a fantastic neighbourhood plan, which has been published this month and will be consulted on until 29 November? Does he agree that an important part of localism is getting local people to respond to such plans? Will he give some encouraging words from the Dispatch Box to residents in Chalfont St Peter, to ensure that we get maximum feedback on that excellent local plan?
One of the areas I was really pleased to find that I had responsibility for when I took up this post was neighbourhood planning, because my own constituency has made good use of it. The residents of Chalfont St Peter should be congratulated on embarking on this process. I am sure that any assistance that the Department can give and any guidance that is available will lend a hand.
With the new homes bonus we provide £235 million in grant and £130 million to local authorities for homes brought back into use. We have revised and are further reviewing permitted development rights. Since 2010, over 40,000 homes that were long-term empty have been brought back into use.
Does my right hon. Friend agree that bringing empty homes back into use is important not only as a sustainable way of increasing the local housing supply but because it can alleviate the negative impact that neglected empty homes can have on communities in constituencies like mine and similar areas?
My hon. Friend makes a very reasonable point. Derbyshire has benefited from £600,000 of empty homes funding, and I am sure that that will make quite a difference to her constituency. The substantive point is that this not only gets housing back into stock but means that streets and communities are not blighted. It is a win-win for just about everybody.
But what about the 300 empty homes in Wirral since the advent of the bedroom tax, including a block in my constituency that now looks set to be demolished without any plan for a replacement? This threatens dereliction in parts of Wirral. Is the bedroom tax not causing empty homes and risking antisocial behaviour, and is it not a false economy, never mind bringing empty homes back into use?
The hon. Lady exaggerates. The spare room subsidy is a reasonable and effective way we can ensure housing for people who need it where there is a shortage of housing. It is absolute nonsense for Labour Members to complain about empty homes: on their watch, we lost 420,000 houses in this country, and that is a disgrace.
On our high streets 40,000 shops—one in seven—are sitting empty, partly because of very high business rates. Will the Secretary of State support our proposals to give local retailers an average saving of £450 a year by freezing business rates?
Under the previous Labour Government, business rates shot up. We have offered local authorities and small businesses a complete removal of business rates through discounts. Under Labour, it was much more difficult to obtain those discounts. Frankly, the hon. Gentleman has got a cheek to make that suggestion.
Council Tax Support
These are local schemes and it is therefore for local authorities to ensure that the effect on low-income council tax payers is proportionate and fair. This coalition Government have made a £100 million transition grant available to help councils to develop well designed schemes and maintain incentives to work.
That is a pittance. Last week the Minister said on the BBC that he was making sure that councils have the ability and the money to protect the most vulnerable people from his council tax benefit changes. How many of the vulnerable—the disabled, carers, war veterans and war widows—have been affected by the policies he has imposed on the nation?
As I said, these are local schemes. I can confirm to the hon. Gentleman that under Labour spending on council tax benefit hit £4 billion a year, costing hard-working families almost £180 a year and costing more than education, defence and health combined. This Government are dealing with the mess of the economic deficit and debt left by his party’s Government.
Does the Minister believe that disabled people being summonsed to court, three-bedroom houses that cannot be let and poor people having to choose between paying their council tax bill and eating constitutes a success? If so, what would constitute a failure?
Failure would be going back to the policies of the old Labour Government, when council tax and spending on council tax benefit doubled, costing hard-working families about £180 a year each. That is exactly why this Government have put in £100 million to help councils have the time and space to develop good schemes to protect the most vulnerable, which they have a duty to do, and it is also why we have protected pensioners.
Local Government (Savings)
I published “50 ways to save”, a practical guide for councils, which describes how they can make the most of their budgets to deliver savings, protect front-line services and keep council tax down.
East Hampshire district council has saved more than £5 million since 2010 by joining forces with Havant borough council and establishing a joint senior management team. What other such opportunities might exist elsewhere and what guidance has been given?
I commend East Hampshire and Havant councils for their excellent work together. To be frank, this is the future, whether we are talking about a relatively small district, a county or a unitary authority. It makes sense to work together on joint procurement, joint use of offices and shared services. That is probably one of the reasons why the recent BBC ICM poll shows that in many areas resident satisfaction in services such as rubbish collection, schools and libraries is improving.
The Prime Minister says that we are all in this together, but between 2010-11 and 2012-13 his local authority of West Oxfordshire—one of the least deprived in the country—is losing only £34 per head, compared with Hackney, the most deprived area in the country, which faces a massive cut of £266, and my constituency, which faces a cut of £234. Does the Secretary of State think that is fair and will he reassure the House that the local government financial settlement for 2013-14 will narrow the gap?
If the hon. Gentleman is going to ask a Whips’ question, he should at least try to memorise it. He will know that the top-spending authorities, which are largely Labour authorities, are getting something like an extra £700 per household. To compare a tiny district council with his own is utterly ridiculous.
Through the Secretary of State, may I thank the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Great Yarmouth (Brandon Lewis) for visiting Kettering borough council last week? Would the Secretary of State like to take this opportunity to congratulate the council, which for the past three years has frozen council tax, has not cut any front-line services and has maintained all its grants to the voluntary sector?
Liverpool city council will have seen a real-terms Government grant cut of 56% between 2010 and 2017. That £329 million reduction means that come 2017 we will have a shortfall of £17 million for mandatory services. Why are the most deprived areas being hit the hardest?
We are funding hard-hit areas to a greater extent. Something like the amount of money paid per household in Liverpool will be well above the amount that is paid in more prosperous parts of the country. I do not recall the hon. Lady saying that kind of thing when we put together the multi-million-pound city deal for Liverpool.
Local Authority Recycling Sites
We do not hold that information centrally, but I was pleased that the recent ICM poll for the BBC, which the Secretary of State has mentioned, showed that resident satisfaction with both recycling and refuse collection has risen while council tax has been kept down.
The main recycling facility at a supermarket in my town centre has been removed by the council, so my constituents have to drive to Aldridge or Bloxwich to recycle paper, cardboard and bottles. What steps can the Minister take to support the council to return the facility to the town centre?
As the hon. Lady knows, we are very keen on weekly waste collection. I was pleased to see the satisfaction with recycling go up. I am sure that, with her efforts, a good local consensus will be found. I am delighted that she is singing from the same hymn sheet as the Secretary of State.
May I commend Hambleton and Richmondshire district councils for their responsible recycling? What conversations has my hon. Friend had with Ministers in the Department for Environment, Food and Rural Affairs on reducing the amount of packaging? Seldom do I find myself agreeing with Jeremy Clarkson, but on this occasion he may be right.
Fire and Rescue Service
I welcome the fact that Saturday’s industrial action was called off, as I am sure do Members across the House. That was a direct result of my Department’s facilitating constructive discussions between the employers and the Fire Brigades Union. I hope that that will provide the basis of a lasting agreement which ensures that hard-working firefighters have one of the most generous pension schemes in the public sector, while being fair to taxpayers.
Like the Minister, I welcome the fact that the firefighters’ strike that was planned for last Saturday was called off. I hope that the decision to conduct further talks will result in fruitful negotiations and sound guarantees for the firefighters. Will he tell the House why industrial action had to be called before he would agree to talks through ACAS?
If I may correct the hon. Lady, it was my suggestion to involve ACAS. I cannot say why the Fire Brigades Union called the strike action in the first place. We said that it was unnecessary and we still believe that it is unnecessary. We hope that the Fire Brigades Union and the employers implement the principles that they agreed with our facilitation to ensure that nobody is left without a job or a pension at the age of 55.
I congratulate the Minister and his officials on the sensitive way in which they have carried out the difficult negotiations. Will he confirm that, subject to the sensible resolution of details between the employers and employees, the cost envelope and principles that have been agreed will not only protect firefighters in cases of genuine ill-health retirement, but allow them in cases of full service to retire on one of the most generous pension schemes in the public sector?
I thank my hon. Friend for his kind comments. As he will know from the excellent work that he did in negotiating with the Fire Brigades Union for the first two years of this Government, the issue of fitness and capability is for the employers to resolve, not the Government. I am pleased that we were able to facilitate the parties in coming together and I hope that they will come to a conclusion that ensures that firefighters have one of the best pension schemes in the public sector.
The Minister responsible for the fire service has not been doing his job. First, he wanted to privatise the fire and rescue service; then he imposed reckless cuts on it. Now he is suggesting that the fitness standard should be lowered so that front-line firefighters can be forced to work until the age of 60. Does that not display contempt for these courageous public servants who risk their lives to keep us safe? Does he not agree with me that it would be more appropriate if he did his job? If he had done it properly in the first place, the dispute could have been avoided.
The hon. Gentleman does himself a huge disservice in the way that he puts the question, for a couple of reasons. Putting aside the fact that the retirement age of 60 came in under the Labour Government in 2005, the issue about fitness and capability is, as I have said, for the employers and the Fire Brigades Union to resolve. I am delighted that we have brought them together.
My hon. Friend is quite right. He reminds me that the hon. Member for Derby North (Chris Williamson) also made a point about privatisation. As has been made clear a number of times from the Dispatch Box, that is a fallacy that he made up. I know that he continues to perpetuate it, but it is a complete fallacy and is not what this Government are doing.
My hon. Friend the Member for Banbury (Sir Tony Baldry) is right that firefighters will end up with one of the best schemes in the public sector and that the age is being brought into line with the police and the armed forces.
Adapted Housing (Disabled People)
13. What estimate he has made of the average cost of adapting properties for disabled people who move home because of the under-occupancy penalty. (900561)
We have provided local authorities with £25 million of discretionary housing payments this year to assist under-occupying disabled people who live in significantly adapted accommodation and who are affected by the removal of the spare room subsidy to remain in their homes.
Does the Minister agree that it makes absolutely no sense to move people who have had their homes adapted to other homes where they are in danger of having to incur further costs on the public purse? I have heard from people who received a discretionary housing payment in the first round, and they are now being told that they will not get one. Will the Minister assure my constituents, and those across the country, that they will not be forced out of their homes when they have a disability?
The fund is discretionary so it is up to local authorities—including those in Scotland—to decide how to spend the money. We would obviously expect them to take into account the public money spent on that property previously, and consider what is in the best interests of the tenant.
I welcome the Minister to his new responsibilities.
More than half of those hit by the bedroom tax are disabled, and nine out of 10 disabled people who are not receiving discretionary housing benefit are cutting back on food or bills and having to choose between heating or eating. Does the Minister advise them to put on another jumper, skip a meal, or move to a non-adapted property that then has to be adapted at huge cost to the taxpayer?
I, too, welcome the hon. Lady to her post.
I would not presume to advise an individual at all; each individual must make up their own mind about how they will adapt to a change in circumstances. I advise local authorities, housing associations and local advice bureaux to work holistically with each tenant affected by the policy, and to consider what advice and support can be given so that they can transition to the new arrangements.
18. What assessment he has made of the availability of smaller properties for people affected by the under-occupancy penalty. (900567)
The Department and the Homes and Communities Agency publish information annually on the number of social rented properties by size, and during the year the number of properties available for letting will vary.
I welcome the Minister to his new position, but I must say that that answer was rather vague. It has been reported that there are enough one and two-bedroom social housing properties for only 4% of those affected by the bedroom tax. Does the Minister expect the other 96% of those affected to go into private lets? If so, will that not send housing benefit payments shooting upwards, rather than cutting them?
Clearly, the implementation of this policy will take a while, and each tenant must weigh up their own circumstances and consider how they adapt. As I said previously, I expect local authorities to work with all housing providers in an area, including the private sector—in my constituency more people rent in the private sector than in the public sector—and consider the best use of stock and what assistance is most appropriate for the individual.
In Hackney, 3,581 households are affected by the bedroom tax, and since April only 70 have been helped into smaller accommodation. The scale of the problem is such that to meet demand we need just under 2,000 one-bedroom properties, and just over 1,200 two- bedroom properties. The Minister may say that we should look at other solutions, but what solutions does he suggest for a borough such as Hackney?
I do not have information for the hon. Lady’s constituency, but across London 78% of people on housing benefit are unaffected by these changes, and many of the balance will be affected only by one bedroom. As I said, I expect local authorities, including Hackney, to look across all housing providers in the area and consider best use of the stock. The hon. Lady’s constituency and mine are not utterly dissimilar, and there may be people living in overcrowded accommodation in the private sector who could move into houses that are freed up in the social sector. Then everyone would be better off.
Each circumstance is different. As I said to the hon. Lady’s London colleague, the hon. Member for Hackney South and Shoreditch (Meg Hillier)—I am sure this is also true in West Ham—there may be people living in overcrowded conditions in the private sector who desperately want bigger accommodation that is available only in the public sector. That is the housing casework that has come to me over the past eight and a half years of representing an inner-city constituency. We are spending huge amounts supporting people in overcrowded conditions, and across the private and public sectors we are not making best use of the housing stock available.
Section 106 Agreements (Schools)
19. If he will make it his policy that planning authorities ensure that section 106 agreements produce adequate funds to finance the building of schools forming part of the planning approval when granting consents for major residential developments. (900568)
The national planning policy framework is clear that development should be sustainable, and that local authorities have a responsibility to make plans to provide the necessary infrastructure to meet the needs generated by new development.
I am most grateful to the Minister; he could not have been more clear. With that in mind, will he agree to meet me and representatives of the Essex education committee so that we can avert a monumental planning blunder? Consent is about to be granted, or could be granted, for 1,600 homes when the section 106 agreement is seriously deficient.
I know that my hon. Friend has already met the Secretary of State about this issue and has also asked for the application to be called in by the Department. That means that one of us has to be able to decide the issue. I therefore hope that my hon. Friend will understand if I do not take up the offer of a meeting, for fear that no Minister will be left to decide.
Local Authority Performance
My hon. Friend may well know that we have reduced burdensome top-down assessments of the performance of local authorities. We have abolished the unnecessary and invasive comprehensive area assessment, and strengthened local accountability through transparency measures, making councils accountable to the local people who elect them. The recent BBC ICM poll suggests that residents are currently happy with council services.
Councils across the country have reason to be grateful to the Secretary of State for getting rid of the costly and bureaucratic comprehensive area assessments, and for replacing them with an optional system of councils inviting local government leaders to conduct a review. In that regard, has the Minister seen the very positive outcome for Conservative-controlled Rugby borough council? Its report was overwhelmingly positive and the leader was described as providing a
“strong and progressive focal point”.
Getting rid of comprehensive area assessments has saved the public purse around £28 million a year. On top of that, work going on now means that there is a constructive, involved approach from the sector—opening up and looking more sensibly at what works—rather than a tick-box culture. I am delighted that such a good Conservative authority is showing so highly in the process.
The Minister will be aware that the Local Government Association has independently assessed that Tory-led West Somerset council will not be financially viable in future. How many more local authorities does he believe will not be financially viable in future as a result of his Government’s cut to local services?
The hon. Gentleman gives a good example of where the sector and the LGA are working closely with the council to help it to work its way through shared management, particularly shared senior management, and shared services, which will bring the kind of savings needed—it is a small district council serving just 35,000 residents—and take things forward in a prudent and sensible way. That is the sector helping itself rather than the old tick-box culture that cost everybody so much.
I refer my hon. Friend to the answer I gave to our colleague, my hon. Friend the Member for South East Cornwall (Sheryll Murray), in Question 5.
Yes. The Department has so far made £60 million available to communities to support them in taking up their community rights. I advise the hon. Gentleman to advise his constituents to look at the booklet we have published, “You’ve got the power”, and—more likely—at the website, mycommunityrights. org.uk.
I welcome the hon. Ladies and hon. Gentlemen on the Opposition Front Bench to their new responsibilities. I hope they will be very happy.
In the past week, we have announced a series of measures to help families in housing. Local people and armed forces rather than foreign nationals will be given priority in council house waiting lists; fraudsters who illegally rent out their social homes for profit will face new criminal sanctions; private tenants will be better protected from the small minority of rogue landlords and letting agencies; and family-friendly tenancies will be supported as part of the move to expand the provision of quality rented houses. The Government are on the side of hard-working people, backing those who do the right thing.
Everyone in Bolton is working hard, despite difficult circumstances, to revitalise our town centre, but one of our biggest problems is expensive car parking. While the council is doing its bit to help, what can the Secretary of State do to encourage local authorities to deliver free car parking schemes, so that town centres can compete with out-of-town shopping?
What an excellent question. I agree entirely that local authorities have a responsibility. When my own local authority introduced half an hour free parking throughout the borough, it made an enormous difference. Expensive parking is cutting off the nose to spite the face. The more people come into a town centre, the more profitable it becomes and the better it is and the more people feel it is like home.
T2. My constituency is home to a great many members of the armed forces. As is well known, levels of home ownership are below average among this group, not least because credit is difficult to obtain for a whole slew of reasons particular to the profession. Will the Minister update the House on the progress made in addressing this problem? (900574)
As a former soldier, I thank my hon. Friend for asking that question and applaud him for his interest. Every day, a military family is taking up home ownership as a consequence of the Government’s intervention. To date, 780 families have taken advantage of First Buy and our home loan equity plan.
In April, the Secretary of State imposed a council tax increase on more than 2 million people on low incomes, because of his changes to council tax benefit. In response to a survey from my office, 112 councils revealed that 156,000 people, including the disabled, carers, veterans and war widows, have already received court summonses. Citizens Advice is seeing people who are having to choose, as it puts it, between staying on the right side of the law and feeding themselves. Since the right hon. Gentleman is responsible for the position they now find themselves in, what advice would he give them about what they should do?
My advice is, “Don’t use bogus statistics and bogus surveys.” The official statistics show clearly that the numbers of summonses and collections are in a much better position than they were under Labour. I remind the right hon. Gentleman that there were 3 million summonses a year under Labour. Collection is up and defaulting is down.
Once again, the Secretary of State does not want to take responsibility for the change he introduced. He should be very careful before he accuses local authorities of producing bogus statistics. I have here the reply from Brentwood council, which has issued 250 summonses; I have here the reply from Epping Forest council, which has issued 337 summonses; and, as the Under-Secretary of State for Communities and Local Government, the hon. Member for Grantham and Stamford (Nick Boles) is sitting there looking at the floor, I will tell him that South Kesteven has issued 585 summonses. Is it not the truth that the Secretary of State is in denial about the facts and the hardships that his tax rise is causing to people who, remember, are on the lowest incomes, which is why they receive council tax benefit?
The right hon. Gentleman should be careful. I was not accusing councils; I was accusing him. He talks about Brentwood council: its statistics show that there is virtually no change from the previous year. He is trying to make bricks out of straws. He had a campaign and it was not very successful. A lot of local authorities are doing well and are protecting the poor and the vulnerable. By and large, it is Labour authorities that are letting the side down.
T4. I congratulate my right hon. Friend on his initiatives to ease the cost of parking on our high streets. Does he agree that one of the simplest ways for local authorities to operate is to offer 30 minutes of free parking on roads outside shops, as that will revitalise our neighbourhood centres? (900576)
My hon. Friend will recall that under the previous Government, councils were urged to put up car parking charges and to make it difficult for people to bring cars into town centres. As I said earlier, I know from personal experience that the policy he suggests makes a difference. If we are to protect our town centres, particularly our smaller shops, this is exactly the kind of measure that needs to be introduced, and those councils that do not do so are failing in their duty.
T3. The Secretary of State’s answer to my hon. Friend the Member for Corby (Andy Sawford) was just not good enough. When more than one in 10 small businesses now say that they spend the same or more on business rates as on rent, why will he not do more to help struggling small businesses on our high streets by implementing a cut and then a freeze worth up to £450 to the average business, as the Opposition would do? (900575)
The small business discount has trebled under this Government. Also—this is a new thing we have introduced—local authorities now have total discretion over what discount to offer, and we will come up with half the money, so frankly the hon. Gentleman’s council needs to sort itself out.
T6. I welcome the £190,000 transitional funding to Swindon borough council last week, which recognised, yet again, the innovative ways in which Conservatives are transforming public services. Does the Minister welcome the innovative steps under way in Swindon to ensure that parking facilities and charges are delivering that much-needed town centre regeneration? (900578)
It was a pleasure to visit Swindon recently to see the great partnership work it has got going across the public sector. It was a good example of how to move forward in a new and modern way, reducing costs and getting better results for residents. To hear that it is also looking at sensible schemes to make it easy and affordable for people to park and get back into their town centre reconfirms how good a Conservative council Swindon now is.
T5. According to Government figures, my council, North Tyneside, one of the poorest areas of the country, is facing a 2% cut in spending power this year, while the Prime Minister’s council, West Oxfordshire, one of the richest parts of the country, will have an increased spending power of 3%. Will the Secretary of State explain to people in North Tyneside how this is fair? (900577)
T8. Following analysis by SPARSE Rural, it has come to light that Cheshire West and Chester council received £273 core Government funding per head; that neighbouring Liverpool council received £635; and that Manchester city council received £584. Will the Minister commit to investigating whether Cheshire West and Chester council is getting the support it needs to provide the services it is bound to deliver? (900581)
I admire my hon. Friend’s work in championing his area, and I am pleased he highlighted how Liverpool council has among the highest spending powers per head in the country. I am happy to meet him and representatives from his council, but I would point out, as we said in a debate a couple of weeks ago, that an independent report in the House of Commons Library this year showed that the funding settlement was fair not just to north and south, but to rural and urban areas.
T9. What recent consideration have Ministers given to allowing authorities such as Poole, Bournemouth and Dorset to share transit sites for Travellers, given the lack of space in the conurbation and the great need for the police to be able to invoke section 62 powers when, for example, play areas become unavailable for use by local children during the school holidays? (900582)
The hon. Lady was kind enough to raise this matter with me a few weeks ago. There was some suggestion that there was a prohibition on adjoining local authorities’ sharing facilities. Having checked with the planners in my Department, I am happy to report that there is no restriction. We would very much welcome the idea of local authorities working together on this important and sensitive issue.
One of the things we were concerned about was that we might repeat some of the mistake’s that Labour made over rent controls and the placing of a lot of burdens on landlords. The last thing we wanted was to see a great plunge in the availability of properties for tenants. So, by and large, I think that this has been a very good thing.
The Planning Minister told us earlier that local councils getting their local plans adopted was the best thing for them to do, but is that sufficient to enable them to defend those policies against the increasingly confident threats from developers to overturn them on appeal on the ground of a lack of a five-year housing supply?
I am happy to reassure my hon. Friend that it certainly is sufficient. One of the decisions that I have most enjoyed taking in this job has been to support the decision of a local authority, which had well in excess of a five-year land supply, to refuse an application for speculative development in an area where it did not want development.
The Leeds core strategy is currently being examined, with the council proposing what it admits is a hugely ambitious target of more than 70,000 houses and with the developers pushing for even more. Such huge targets would see up to 80% of new homes in my constituency being built on greenfield or green-belt sites. What appeal mechanisms exist for my constituents, should the inspector approve such unrealistic targets?
Local authorities have to assess their housing need objectively. They can sometimes exaggerate or underplay it unrealistically, but any local plan has to go through an intense process of local consultation before it can be adopted. That will give my hon. Friend’s constituents every opportunity to say what they think of those assessments.
The Minister will know that the Williams review made it clear that it is possible for firefighters to serve in front-line roles until the age of 60, but only on the basis of a much-reduced level of fitness. Does he agree with that assessment?
The Williams report made it clear that if firefighters keep up their fitness throughout their careers, as they have a duty to do—alongside the fire service’s duty to have a proper programme in place—they will be more than capable of maintaining full fitness until the age of 60. I was pleased by the principles agreed between the Fire Brigades Union and the employers to have a process by which firefighters can maintain their fitness in a proper way, and we will keep an eye on the progress of those negotiations.
The Secretary of State has rightly introduced discretion for councils to reduce rates where possible, particularly for hard-pressed retailers. Will he please put his considerable weight behind our campaign to persuade Enfield council to make the right choices and give relief to our hard-pressed retailers by using that discretion?
My hon. Friend makes a good point, as he did last week in our debate. He is right to suggest that councils seeking to develop their town centres, their businesses and their local economy should look into the discretion we have given them that allows them to discount local business rates in whatever manner they see fit.
May I draw the House’s attention to my declaration in the Register of Members’ Financial Interests? Will the Secretary of State tell the House what his Department’s latest assessment is of the expected level of house price inflation over the coming year?
Surveys show that members of our fire and rescue service are among the most highly regarded of our public servants. Does my hon. Friend agree that the best way for them to maintain that enviable public perception is to continue to take part in negotiations and to continue to reject strike action?
My hon. Friend is quite right. The best thing would be to have no more strike action, and for the employers and the Fire Brigades Union to deal with the issues they are discussing so that we can reach a point at which we can deliver one of the most beneficial pension schemes in the public sector.
Rochdale council’s leadership has only postponed its decision to increase some chief officers’ pay by over 30% and intends to bring it back. Does the Secretary of State share my view that such an inflated increase in pay is not acceptable at this time?
I am embarrassed that my Chief Whip is present when I want to compliment the hon. Gentleman and say that he is almost a lone voice for sanity on this matter. These clearly considerable sums of money, notwithstanding the increased responsibility, are entirely wrong and I would expect the decision to be taken to a full council for a recorded vote. Let the people decide who is most sensible in running their council.
As the Secretary of State will know, Britain’s common bird population is in decline. Will he agree to meet Britain’s new home builders to try to get them to build provisions for wildlife into future designs, thereby restoring Britain’s bird population?
I have had a number of meetings, as recently as last week, with various wildlife groups to discuss how to build into development an understanding of the needs of wildlife. My hon. Friend makes a very reasonable point about the bird population, which, outside my day job, I enthusiastically follow.
Tenants in Nottingham who have been forced to downsize from a two-bed social home to a one-bed private sector home can expect to pay an extra £24.83 a week in rent. The Secretary of State’s bedroom tax is a costly mess; why does he not scrap it?
We do not scrap it because we need to save money right across government. One of the major problems of implementing this policy is the lack of house building—[Interruption.] I know that the hon. Lady is from the 2010 intake and that Labour Members of that intake like to think that 2010 is year zero, but during the 13 years when some of her colleagues were in power, not enough affordable housing was built. That is the problem.
More green belt and green space is under threat in my constituency than ever before, and local people marched in protest yet again at the weekend. Will Ministers tell them why local councillors are being told to pay absolute attention to econometric models and unelected inspectors and not to local people?
My hon. Friend knows that local authorities have to assess their housing needs and then work out how they are going to meet them. It is for local authorities to decide whether they can protect the green belt while nevertheless releasing some small portion of it to meet that housing need, but only after full consultation with local people.
UK Nuclear Energy Programme
I would like to make a statement on the UK’s nuclear energy programme. I am pleased to inform the House that the Government and EDF have reached broad commercial agreement on the key terms of a proposed investment contract for a new nuclear power station at Hinkley Point in Somerset. This paves the way for the construction of Hinkley Point C—the first nuclear power station in the UK for a generation.
Nuclear power has been part of Britain’s energy mix since the 1950s, responsible at points for as much as a quarter of our electricity, but since Sizewell B connected to the grid in 1995, no new nuclear power stations have been commissioned. Eight of the nine operational nuclear power stations in the UK will reach the end of their planned life in the next decade. So the agreement today is a demonstration of the Government’s commitment to a new fleet of nuclear power stations to replace those due to close and to protect Britain’s future energy security.
A contract for Hinkley Point C under the key terms set out today would provide significant benefits for the UK, including up to 25,000 jobs for skilled workers over the course of construction and 900 long-term jobs during the 60-year lifespan of the plant; and a £16 billion injection into the economy, with the potential for British firms to get the majority of the work, and over £4.5 billion paid in corporation tax. EDF estimates that £100 million will go into the local economy every year during peak construction.
Hinkley Point C would supply a stable source of low-carbon, climate-friendly power to nearly 6 million homes—nearly twice the number of homes in London—and would supply 7% of the United Kingdom’s electricity by 2025. It would reduce emissions by the equivalent of about 5% of the UK’s annual carbon dioxide emissions from energy supply compared with unabated gas-fired generation. It would increase energy security and resilience from a safe, reliable, home-grown source of electricity, reducing electricity bills by about 10% compared with a non-nuclear future. With clean-up costs included from the outset, we would be avoiding the mistakes of the past. This is good news for jobs, good news for the economy, good news for bill-payers, good news for energy security, and good news for the environment.
This announcement also represents a significant vote of confidence in the Government’s reforms to the electricity market. We are creating one of the most attractive electricity investment markets in the world, driving an increase in low-carbon technology, and delivering the modernised infrastructure that will provide energy security and cut carbon emissions in the years to come.
Before I go into the details of the terms of the agreement, I want to put on record my gratitude to all who have worked so hard to bring us to this point, in EDF and in the Government, including those in my Department. I specifically thank Lord Deighton and his team for the strong contribution that they have made supporting the DECC negotiating team. I believe that, working together, we have agreed the basis of an arrangement that would provide a good deal for UK consumers. It would meet the requirement for value for money, accord with our “no public subsidy” policy, and provide an attractive proposition for EDF and its investors, offering a reasonable rate of return for the risks that they are taking.
Let me set out the key terms on which broad commercial agreement has been reached. Hinkley Point C would be the first nuclear power station to be built under the new system of contracts for difference that is being introduced by the Energy Bill. CfDs provide low-carbon energy suppliers with predictable future revenues, making it easier and cheaper to secure development investment and finance while protecting consumers should prices rise. The duration of the payments under the CfD for Hinkley Point C would be 35 years, which is about 60% of the 60-year operating life of the plant. That is proportionally similar to the length of the CfDs that are being offered to most renewable technologies.
Under CfDs, low-carbon generators receive a stable price for the electricity that they sell, which is known as the strike price. We have agreed a strike price of £89.50 per megawatt-hour, fully indexed to the consumer prices index. Hinkley Point C will be the first of the new European pressurised reactors in the United Kingdom. This strike price benefits from an upfront reduction of £3 per megawatt-hour, on the basis that EDF’s subsidiary NNB Generation Company Ltd would share the “first of kind” costs of the European pressurised reactors on the Hinkley Point C and Sizewell C sites. If a final investment decision on Sizewell C were not made, the strike price for Hinkley would be £92.50.
An agreement on those terms meets the Government’s value for money requirement. Hinkley Point C would compete with other low-carbon technologies, including onshore wind—the cheapest large-scale renewable—and with new unabated gas plant, including carbon costs, that commission in the same time frame.
Other terms on which broad commercial agreement has been reached provide a series of protections for both sides that together represent an appropriate allocation of risks, including gain share arrangements whereby, if the developer achieves savings during construction or through refinancing or equity sales, the strike price will be reduced; operational cost review arrangements, including reviews after 15 and 25 years to reassess operating costs and adjust the strike price in either direction if necessary; “change in law” arrangements whereby the strike price would be adjusted to reflect cost changes arising from certain changes in law; and compensation arrangements in the event of Hinkley Point C’s being shut down as a result of a political decision, rather than a decision on, for instance, safety grounds.
Separately, and for the first time ever, to deal with the clean-up costs of new nuclear, developers will be required to put money aside in a protected clean-up fund to pay for eventual decommissioning and a share of the waste management costs. This is anticipated to account for around £2 of the strike price. The Funded Decommissioning Programme would need to be approved by the Secretary of State before construction starts. All the terms are subject to contract and form the basis for further negotiation. EDF and Her Majesty’s Treasury will continue discussion regarding the terms of a potential UK guarantee. Ultimately, an investment contract would only be offered to NNBG if we consider the contract to be value for money and in line with our no public subsidy policy. Any investment contract would also be conditional on any required state aid clearance being obtained, and on Royal Assent of the Energy Bill. If agreed, the contract would be laid before Parliament in accordance with the Bill.
EDF has announced today the intent of two Chinese companies, CGN and CNNC, to invest in Hinkley Point C as minority shareholders. This follows the signing last week of a memorandum of understanding on civil nuclear co-operation between the UK and Chinese Governments. The UK and China have a long-standing bilateral agreement to co-operate on the peaceful uses of nuclear power. Chinese companies have an established track record in delivering safe nuclear power over the past 30 years. Any company getting involved in the UK’s nuclear power industry does so in accordance with the most stringent regulations in the world and, on this basis, we welcome companies that can demonstrate the capability to contribute to safe nuclear power generation in the UK.
In conclusion, I respect those who have long been opposed to nuclear technology on principle. As the record shows, I personally have had my concerns in the past, and so has my party, but I am satisfied—and I am sure Opposition Members who have had their concerns in the past are satisfied—that the safety and legacy issues relating to the new nuclear power programme are manageable, particularly with the protected clean-up fund.
With regards to the issue of cost, I am clear: this is not a deal at any price. This is a deal at the right price. Consumers will not have to pay over the odds for new nuclear. The price agreed for the electricity is competitive with the projected costs for other plants commissioning in the 2020s, not just with other low-carbon alternatives, but with unabated gas. As set out to Parliament in October 2010 and again in February this year, new nuclear will receive no support unless similar support is also made available more widely to other technologies. Nuclear will get no special favours
We have a huge challenge ahead of us. With many old and dirty power stations closing down over the next decade, the capital investment required to replace that electricity generating capacity is around £110 billion between now and 2020, the largest infrastructure programme in Government. This agreement is a vote of confidence in the measures this Government are putting in place to attract investment into the system, to make the market work, and to ensure we keep the lights on. We need to decarbonise our electricity sector to meet our emissions targets and our responsibilities to the next generation, and we need a revolution in home-grown energy generation to protect bill-payers from price rises caused by volatile world gas markets.
Nuclear power is a key part of the Government’s energy security strategy. This announcement is another step on the path to realising a safe and dependable source of clean power for millions of homes, jobs for thousands of skilled workers, a boost to the economy and reductions in electricity bills over the long-term. I commend this statement to the House.
As the Secretary of State is aware, there have been severe disruptions on the railway line today between Doncaster and London, owing to a power failure, which have prevented my right hon. Friend the Member for Don Valley (Caroline Flint) from being here—she sends her apologies to the House, Mr Speaker.
I thank the Secretary of State for giving me early notice of his statement and congratulate him on making it back from Hinkley this morning looking slightly less damp and dishevelled than he did earlier. At the outset, let me make it clear that we support new nuclear power in Britain as part of a balanced, diverse and lower-carbon energy mix. Of course, we will look in detail at the agreement, and those aspects of the agreement yet to be concluded, but in principle we believe that nuclear power is safe, and that it contributes to our energy security, reduces our carbon emissions and makes us less vulnerable to the vagaries of wholesale gas prices.
Today, I want to ask the Secretary of State about three aspects of his statement, the first of which is the very important one of value for money. He has announced a strike price of £92.50, of which £3 will be shared as “first-of-a-kind” costs with Sizewell C, should that development go ahead. Can he explain how that figure was arrived at, and why he believes it represents good value for money for consumers? Will he also confirm that any change to an investment contract will be published, and that any change which results in an increase in cost to consumers in the view of the panel of independent experts will be classed as a “varied investment contract” and therefore laid before Parliament for debate? EDF has also said that its £16 billion budget included a contingency fund. If that fund is not used, or if costs underrun, what mechanism will there be to ensure that compensation goes to consumers, rather than to the general Treasury pot?
Secondly, let me turn to the impact of the announcement on our environment, on the local community and for the economy. The Secretary of State will be aware that the Energy Act 2008, passed by the last Labour Government, means that before consents for new nuclear power stations are granted, the Government have to be satisfied that effective arrangements exist, or will exist, to manage and dispose of the waste they will produce. In January, although Copeland and Allerdale borough councils were in favour, Cumbria county council voted to withdraw from the process to find a host community for an underground radioactive waste disposal facility. I understand that his Department has started a new consultation exercise to find a host site, so is he satisfied that the arrangements to manage and dispose of the waste produced at Hinkley Point C are in place?
There is also agreement across the House that communities that host nationally significant infrastructure should be compensated. In July, the Government announced a package of community benefits, but those come into force only when the plant is operational and not during the construction phase, when disruption is likely to be greatest. What consideration has the Secretary of State given to the Select Committee’s recommendation, which I know is shared by Sedgemoor district council, to extend community benefit to the construction period?
The Secretary of State also mentioned the wider economic benefits of the investment. We share his desire that today’s announcement will help to create a strong British supply chain and secure highly skilled engineering, construction and operating jobs. Last week, the Government signed a memorandum of understanding allowing Chinese companies to take a minority stake in nuclear developments in Britain. Given the nuclear expertise that exists in this country, can the Secretary of State tell the House what provisions were made to allow British firms to advise on and be involved in nuclear build in China?
Thirdly, we hope that today’s announcement is the first in a series of new nuclear projects in Britain, so let me finish on the lessons of these negotiations and today’s agreement. Today’s announcement is subject to EU state aid approval, so will the Secretary of State tell the House whether he has received any indication from the Commission about whether approval is likely to be granted and in what time scale? What are the Government doing to ensure that other potential nuclear sites are developed? Does he also accept that today’s agreement shows that long-term certainty is what really matters to unlock the investment we need, not allowing overcharging to continue now? The Government say that they cannot freeze electricity prices for 20 months, but he has just set them for 35 years for companies producing nuclear power. So does he therefore further accept that when on 24 September he said that our 20-month price freeze proposal would put “investment in doubt”, today’s announcement shows him to have been completely wrong?
Finally, as this comes on the same day as npower became the third big energy company to announce another price rise, and in light of the potential costs of this agreement, does the Secretary of State now accept that it is all the more crucial that we reform the retail energy market so that it is clear, fair and transparent, and so that consumers can have confidence that prices as well as investments provide value for what is, after all, their money?
I am grateful to the hon. Gentleman for his response and, of course, we understand that the right hon. Member for Don Valley (Caroline Flint) has been detained through no fault of her own. I think the power failure shows that we need this investment in our economy.
I welcome the support of the hon. Gentleman and of the Labour party. Let me go through his questions. He asked first about value for money and how the figure was arrived at. We have had a huge amount of negotiations. The hon. Gentleman will have noticed that many people thought that we would end up with £100, £97 or £95 per megawatt-hour. We have done a lot better than that—we have got the figure under £90, and I do not think that anyone thought that we would do that. We have got a good figure through hard, tough negotiations.
As for the hon. Gentleman’s question about value for money tests, he will know that as we have said on the record we have compared what we have achieved with the price of low-carbon generation and gas plus the carbon price. We believe that we will be able to show, both now and when we sign the final investment contract, that we have met that test. He asked whether any changes in the future would be published and I am sure that that will happen. It is very important that Parliament is kept abreast of those big changes.
The hon. Gentleman asked what would happen if the construction costs, including the contingency fund, were not used. If EDF and NNBG make savings on the construction plan, as projected, the good news is that we have negotiated a gain-share for the consumer. The consumer will have no pain-share: if the construction costs go higher, that risk is taken by the developer, by EDF, but if the construction costs are lower, the consumer will benefit. That has not happened before, and it is a welcome protection for the consumer.
The hon. Gentleman rightly asked about waste. I can tell him and the House that I am satisfied that arrangements are in place to deal with the nuclear waste, both in the interim and in the long term. He mentioned the consultation and that is part of that process.
The hon. Gentleman asked about community benefits and he is right that the package we announced last July comes into play only when the power station is operational. We have heard the Select Committee’s recommendation and, although I cannot prejudge our response to it, we will listen to it carefully. I will only say that EDF is already benefiting the community, investing in skills and young people in the area, and economic benefits will flow during the construction phase. EDF has already said that during the peak construction £100 million will go into the local economy every year. The local community will benefit even before the community benefit package is in place.
The hon. Gentleman asked about the memorandum of understanding and how it relates to UK companies going to China. He is absolutely right: the purpose was to ensure that UK nuclear companies, and there are many, get some benefits from exports and from working in China and other markets. That is important.
The hon. Gentleman made an important point about state aid. Of course, we were in touch with the Commission before the notification. Now we have formally notified, we will continue that contact. The Commission does not tell a member state ahead of notification whether it will grant approval—of course it does not—and it will not commit itself to a time scale. I am pleased that Commissioner Almunia has told us that a team will be in place in a timely fashion and will treat the issue with the priority it deserves.
The hon. Gentleman went on to ask how other nuclear sites are doing. I could go into a lot of detail, but let me simply give him one example. He will know that Hitachi bought the Horizon site and its nuclear reactor design is in the generic design assessment phase with the Office for Nuclear Regulation. Hitachi wants to proceed with its investments and, in due course, will enter negotiations.
The hon. Gentleman wanted to relate today’s deal with Labour’s price fix con. He was trying to argue that Labour’s price fix con must be possible if we can offer a fixed price for nuclear for 35 years. Once again, the Labour party shows its economic illiteracy. Given that the Leader of the Opposition did my job, he ought to know that even if a part of the electricity generation mix has a fixed price, the majority of generating costs remain variable and will be for some time. The fact that generating costs and wholesale costs are variable, often unpredictably so, means that prices sometimes have to change to avoid firms going bust. The fact that the Opposition’s energy price fix con cannot address this is bad news for consumers, bad news for competition and bad news for investment. It is genuinely worrying that the Opposition cannot see that.
Finally, the hon. Gentleman referred to npower’s decision today, which is extremely disappointing. I would say to npower’s customers, as I have said to British Gas customers: thanks to this Government there is a choice. Under the previous Government, who created the big six, there was not a choice of independent suppliers. There are now 15 independent suppliers taking on the big six. There is a real choice now—real competition—and that is a new development. It was not the case under Labour. So we are reforming the market in the Energy Bill, creating competition and getting a much better deal for the consumer. This is a good deal for the consumer. The only thing that would not be are the Labour party’s policies.
I thank the Secretary of State and my right hon. Friend the Prime Minister for coming this morning to see exactly what is going to happen at Hinkley C. This is very good, not only for my constituents, but for the United Kingdom. I have with me the prospectus for Sedgemoor district council, which the Opposition spokesman mentioned. We are open for business and this decision is important for upping skills, upping engineering and upping inward investment, not just for Bridgwater and West Somerset, but for the United Kingdom. Does the Secretary of State agree that today is a very good day for the British economy and for nuclear power in Britain?
I pay tribute to my hon. Friend, who has championed this investment over a number of years. I saw on my rather wet visit this morning to Hinkley Point C that he is well known on the plant. The fact that he is focusing on the skills agenda, and that the Prime Minister and I met a lot of young apprentices who are looking forward to working at Hinkley Point C for many years, shows the potential for this development—what it means for the community that my hon. Friend represents, the wider economy and the British economy. It is indeed a good day for the British economy.
Even accepting the case for Hinkley, why is the Secretary of State not giving in-principle support to the Severn barrage, which would deliver clean green energy at half the price, at a similar strike price, over three to four times the lifespan of Hinkley and with three times the number of jobs? I just do not understand it.
I am grateful for the right hon. Gentleman’s persistence in this issue. He knows that I have met him and looked at the figures that have been produced by those who want to see a Severn barrage created. It would not be at half the price; it would probably be at double the price; it is extremely expensive. No one would be more delighted than I if we could see tidal power in the Severn. I believe it will come, but the price will have to come down because we must protect the consumer.
Does my right hon. Friend agree that this news has been very long awaited and is therefore all the more welcome for that? Does he also agree that the prospect of Chinese investment in the nuclear industry in this country is extremely welcome, not least because China entirely shares Britain’s objectives of trying to reduce its dependence on fossil fuels for electricity generation, and also because China recognises that the safety and inspection regime of the nuclear industry in this country is the most stringent in the world?
I am grateful for my hon. Friend’s support in this matter. He is right to make it clear that Chinese investment into Britain, and in this case into our electricity supply system, is very welcome. We already have it. There are billions of pounds of Chinese money invested in the UK’s electricity industry and in our wider industry. I talked to EDF today, which has been working in China for more than 30 years. EDF has been partnering Chinese nuclear firms for a long time, so this partnership ought to be welcomed in the UK.
I welcome this announcement, but the departmental press release said that up to 50% of the work would be available for employment in this country. Can the Secretary of State clarify whether 43% will not be available? Given the rundown in capacity in the construction industry and the shortage of our engineers, can he say what is being done to maximise the employment potential?
I am grateful to the hon. Gentleman for his welcome. He is right that we have negotiated a deal so that 57% of the value will go to UK firms, ensuring that they can get the benefit and develop their skills and that UK employees can be a big part of the project. We would have liked the figure to be higher, but unfortunately not a lot has happened in the nuclear industry for many years. I wonder whether Opposition Members might like to explain why that is. This Government have looked forward to ensure that there will be a better future for British nuclear firms, not only as a result of this deal, but because earlier this year my right hon. Friend the Secretary of State for Business, Innovation and Skills and I published an industrial strategy for the UK’s nuclear industry, looking at all aspects, so that British firms and British people can benefit as we develop clean, low-carbon nuclear power in this country.
I welcome the statement and, in particular, the fact that there will be a degree of protection for the environment because the nuclear industry will be responsible for the clean-up. Will the Minister give a little more detail on how much will be taken in the protection fund and whether there will be Government oversight of its administration?
My hon. Friend makes an important point. One aspect of the arrangements that I believe will be particularly welcomed by consumers and taxpayers is that the operator will have to start meeting the clean-up costs from day one of generation, which has not been the case in the past. Two thirds of my Department’s budget is spent meeting the decommissioning costs of past nuclear power stations that have long finished generating electricity. That was a scandal and past Governments failed. This Government have learnt the lessons and ensured that the decommissioning costs are up front. There will be oversight of how the fund is operated to ensure that we protect future generations and taxpayers.
A 35-year contract that locks UK consumers into paying around double the market price for power does not sound like a good deal to me. If the Minister genuinely thinks that it is fair, will he agree to full examination of the terms by the National Audit Office? He talked about the developers being required to share waste management costs, so can he tell us how big the share will be that the public will have to pay for and what the expected cost of that additional subsidy will be? Finally, since there is a cap on the costs that EDF would have to pay for managing the radioactive waste, can he confirm that if those costs increase above the cap, the British taxpayer will have to pay for any top-up costs, however high they escalate?
I thank the hon. Lady for her question. She might have missed it, but the NAO put out a press release earlier today stating that it will be looking at the details of our commercial agreements, which we welcome, because we are very happy for our proposals to be scrutinised. We have encouraged transparency because we believe that we can make our case. Unlike in previous generations, when the costs were not transparent, we are prepared to be transparent. She might be surprised, because she probably did not realise that the NAO would be looking at this so early. She asks about the public share of waste management. The truth is that the public will have to shoulder a large amount of the cost of nuclear waste, because a vast amount of nuclear waste that has to be dealt with is from the past, from the first two generations of nuclear power stations and from the military’s nuclear programme. That was paid for by the taxpayer and no provision was made for cleaning it up. That is why this deal is different and so good for the taxpayer.
As one Liberal Democrat who supports nuclear power and always has, and who understands the need for mixed energy provision, may I ask my right hon. Friend to advise me on whether this will secure our electricity supply in future? Also, does he agree that this should have been done 10 years ago, because we have been pushed to the brink by the previous Government?
I strongly agree with my hon. Friend. I will make two points in response to his comments. First, 7% of Britain’s electricity needs will be secured when the two reactors are working at capacity, which is expected in 2025. That is a huge bonus for our long-term plans for energy security in this country, and something that was not happening before the coalition Government came to power. Secondly, on his point about the Liberal Democrats, our party changed its policy at our recent conference in Glasgow, and I will explain to the House why we did that. The reasons are similar to those that led me to change my view. Climate change is a huge challenge for our country and for the world. Some people believe that we can combat it simply by using renewables and energy efficiency, but I do not believe that we can. I believe that it is such a serious threat to our world that all forms of low-carbon electricity need to be used. I urge environmentalists in the House to reflect on that.
The strike price of £89 per megawatt-hour is twice the current market rate and more than twice what the Department of Energy and Climate Change was confidently predicting just five years ago. If that were inflation proofed over the whole 35-year period, as the Secretary of State has said, will that not end up costing taxpayers more than £200 per megawatt-hour by the end of the period? What proportion of the loan guarantee for the debt to build two £14 billion reactors is also going to be backstopped by the British taxpayer? Will not the project end up as a colossal financial disaster for the UK taxpayer?
I think the right hon. Gentleman has been saying that for a number of years. He was predicting a much higher strike price, but we have a very good strike price. Let us be clear to the House, because the issue is important. EDF and its co-investors will not receive a single pound, and consumers’ bills will not be touched, until the power stations start generating. The earliest expected time for that will be in 2023—10 years’ time. I have to say to the Labour party that the world will be very different in 10 years’ time, and future electricity and energy prices will be very different. I am pleased that Labour party Front Benchers have welcomed the proposal. Clearly, they support what we have done on prices, and people will have noticed.
Order. Approximately 45 Members are seeking to catch my eye on this extremely important matter. I am keen to accommodate as many of them as possible, but if I am to do so, brevity will be of the essence. That can now be exemplified by a man of great experience and long service in the House of Commons: the right hon. Member for Hitchin and Harpenden (Mr Lilley).
I am grateful, Mr Speaker.
Can my right hon. Friend confirm that the reason we are dependent on foreign companies to build these nuclear power plants is that the last Labour Government sold off Westinghouse to the Japanese and then sold British Energy to the French when the current Leader of the Opposition was Secretary of State for Energy and Climate Change?
Given that the one area in which we retain nuclear expertise is in building small nuclear generators, will my right hon. Friend look closely at the proposals put forward by the noble Lord Ridley for building small nuclear reactors in future, to provide electricity and possibly an export market as well?
My right hon. Friend makes some pertinent and relevant points. I am not aware of the noble Lord Ridley’s proposal, but I am aware that Rolls-Royce has been doing a lot of research and development into small modular nuclear plants, and clearly that is extremely interesting. It shows that there are British nuclear firms with skills and expertise, and they are welcoming our proposals today.
On the issue of the supply chain and its capacity to do the maximum amount of work under today’s announcement, does the Secretary of State regret undermining the UK nuclear supply chain by withdrawing the loan to Sheffield Forgemasters? That limited this country’s capacity to do nuclear work domestically and for export. In the light of today’s announcement, does that not look like a stupid, short-sighted decision?
I welcome the decision to have more power capacity, which we greatly need. However, given the generous financial terms to the investors, did the Secretary of State consider the possibility of reserving some part of the financial investment and provision of capital for British interests? I am sure that many of them would like those sorts of returns.
First, 57% of the value of this project will go to UK firms, and I hope that the right hon. Gentleman welcomes that. I do not believe that these terms are generous at all. We have had hard negotiations to get them down, and EDF realises that. Some of the benefits of the deal we have negotiated need to be held up in the headlights. There is the construction gain share, so that if the construction costs are lower, the consumer gains. If there is a refinancing by the investors in 10 years’ time from which they make a lot of money, the consumer will gain from that refinancing. That never happened with private finance initiative deals when Labour was in power; rather, the taxpayer lost out. We have the refinancing gain share for the consumer, and I doubt that would have happened if that lot had been in power.
How much of the £16 billion of construction costs will the developers of Hinkley Point C be able to offset in tax reliefs and capital allowances? Does the Secretary of State consider it ironic that EDF has insisted on an insurance clause against his own party’s future policy by stipulating that the strike price will rise to reflect any future tax on or shutdown of the industry? While he is at it, will he explain why the strike price for the Flamanville sister plant in France is only £64—some 30% of the £92.50 he has negotiated?
I said in my statement that the UK taxpayer can expect to gain £4.5 billion in corporation tax as a result of this, paid for by the investors, but it is even better than that; I have some very good news for the hon. Gentleman. Because we wanted to make sure that these companies could not rearrange their tax affairs after the deal and somehow reduce the tax funds that we were expecting to come to Her Majesty’s Treasury, we undertook a very unusual clause in our deal to make sure that, should they do exotic tax deals to shelter their tax liabilities, the strike price will reflect that and be adjusted downwards. That is how far we have gone to make sure that the taxpayer and the consumer are protected.
I am sure that my constituents and other people in Cornwall will welcome this because it will stop us having to have another 6,000 wind turbines to generate the same amount of energy. Does my right hon. Friend agree that this will benefit the countryside?
I was agreeing with a lot of what my hon. Friend said. I say to her and to all right hon. and hon. Members that we need a diverse energy mix. If we go for one form of electricity generation, that is far too risky. We need nuclear; we need renewables in all their shapes, forms and sizes; we need carbon capture and storage; and we need energy efficiency. The electricity security challenge is massive, and we need every aspect. The low-carbon challenge is massive, and we need everything to be low-carbon. Onshore wind has a role to play along with nuclear.
Given that the Government have stated that the two really important conditions are value for money and no public subsidy, will the Secretary of State set out how all the details of the negotiations will now be made available to the National Audit Office so that Parliament can scrutinise them? If there is an overrun in construction or time delays, how will the £10 billion loan guarantee work? Will it be a taxpayer grant or a grant for Chinese and other companies?
I have already made it clear to the House that this is going to be the most transparent deal ever. When my ministerial colleagues discussed the issue with Labour Front Benchers during the proceedings on the Energy Bill, we did not undertake to do what we are doing today. We are being more transparent than we promised. We have said that when the final investment contract is signed, we will publish it, and we have committed to that in the Bill. There will be very evident transparency not only on value for money and no public subsidy but an awful lot more. Of course, because we have not concluded the commercial negotiation, there are one or two commercial issues that we will not be publishing at this point, but there will be an awful lot more to see when we come to signing the final investment contract. As for cost overruns, I have made it clear to the House that by negotiating a tough deal, we have ensured that the consumer is protected from those. That did not happen in the past. We have seen cost overruns in nuclear projects time and again, and I was determined that that would not happen this time.
As the former secretary to the Conservative party Back-Bench energy committee of 1983, may I welcome this long-awaited announcement of a welcome increase in the United Kingdom’s energy mix and security? Will my right hon. Friend say in particular how he intends to use this boost to the United Kingdom’s nuclear expertise abroad to add to our reputation, which is much enhanced by our skill in this particular area? Also, although he is welcome to his views on onshore wind, does he agree that some areas, such as north Bedfordshire, have done their bit and there need not be any new decisions made to add to our wind-power capacity?
My hon. Friend needs to address his last point to his local planning authority, because he knows that I do not take those decisions.
The nuclear opportunity for UK companies is, indeed, very big. Many of our companies are already partnering with nuclear companies from other countries to bid for nuclear deals in, for example, the Czech Republic and Turkey. Companies such as Rolls-Royce, Babcock and AMEC are very active in the international sphere, and I think that this project and our ambitions for the nuclear industry supply chain will only further their ambitions.
The Secretary of State said that there would be no public subsidy, but this project will be eligible for consumer-funded payments —subsidies by any other name—of up to £1 billion year, and not for the 15 years offered to renewables, but for 35 years, which is a scandal. Will he confirm that the total cost of this project—£43 billion—is comparable to the entire energy technology budget between now and 2021, and that this single project risks squeezing out domestic energy technologies in favour of imported and expensive nuclear technology?
I am afraid the hon. Gentleman could not be more wrong. Not only do I not recognise his figures, but I am surprised that he is so confident as to be able to suggest them. I admire those in and outside the House who are able to estimate how much this is going to cost, because they clearly know more than me, my officials and the industry. They are clairvoyants, because they know what energy prices will be in 30 or 40 years’ time. I am in awe of the hon. Gentleman. This is a good deal for the consumer and for the economy, and, given that it also delivers on our low-carbon agenda, he ought to welcome it.
I welcome my right hon. Friend’s damascene conversion, which is growing by the minute, and this bold, long-term decision, which stands in stark contrast to 13 years of indecision by the Labour party that put security of supply in this country seriously in jeopardy.
I am grateful for my hon. Friend’s remarks, but I say to him gently that I hope everyone on the Conservative Benches will also understand why I have changed my mind: it is because of the threat of climate change. I hope that all Conservative Members will look at the Intergovernmental Panel on Climate Change report—its fifth annual assessment—and accept the scientific consensus of 269 experts from 39 countries. The evidence that climate change is happening and that man is responsible for it is overwhelming and we need to take action on climate change. If I am prepared to change my views on nuclear, I hope that some on the Conservative Benches are prepared to accept that climate change is something we have to face up to.
Does the Secretary of State intend to present to the House the arrangements he has arrived at in the form of the varied investment contract, as set out in the Energy Bill? If so, will he set out the terms under which the strike price can be varied upwards under the varied investment contract, as well as the terms of the forfeiture of such a contract should the subject to it not deliver within the window set out by the contract when it is signed?
I think I followed that question. The hon. Gentleman is an expert in this area and his points are important. I said in my statement that there will be operation expenses reopeners at 15 years and 25 years, but they will be symmetrical, so if operation costs have reduced, the strike price will come down, and if they have increased and that can be proven, the strike price will go up. That is the only way to manage such a contract over such a long period; otherwise the initial strike price would have to be much higher in order for the investors to undertake those risks. We will be transparent, so over the coming weeks and months the hon. Gentleman and the Select Committee will be able to look in detail at many of the issues he has raised.
As a former industrialist who has long argued for the renewal of our fleet of nuclear power stations, I warmly welcome this agreement between the parties. It will provide constant base load electricity generation, which is necessary for competitiveness. I hope that many other areas will shortly follow suit, not least the north-west. Bearing in mind the reasons for his “conversion”, as he put it, will the Secretary of State try to persuade our European partners that this low-carbon method of producing energy should count towards our renewables obligations?
I am grateful for my right hon. Friend’s comments. Britain is working with a significant number of like-minded member states that wish to develop their nuclear programmes. I believe that nuclear needs to be seen as a low-carbon technology in the European debate, because it will be critical to meeting our climate change objectives in the UK, Europe and the world. I recommend to him and to other right hon. and hon. Members the book by the chief scientist in my Department, “Sustainable Energy—Without the Hot Air”, which is this House would benefit from.
Towards the end of the statement, the Secretary of State said that
“we need a revolution in home-grown energy generation”.
Given that the station is being built by the French and the Chinese, that was an interesting comment. What steps are the Government taking to ensure that British companies can build power stations?
Earlier this year, my right hon. Friend the Secretary of State for Business, Innovation and Skills and I published an industrial strategy for the nuclear industry in the UK to do just that. On the home-grown point, the danger is that if we do not produce energy in this country, whether through nuclear or renewables, we will be increasingly dependent on imports of gas from the other side of the world. That would leave our economy vulnerable to the supply of that gas and to vulnerable wholesale gas prices, which could hit consumers badly. That is why we need more home-grown, low-carbon energy.
My hon. Friend is right about the comparison with offshore wind. We hope to reduce the costs of offshore wind over the next few years. I hope that in the 2020s, as it grows to be a significant low-carbon generating sector, offshore wind will be much more cost-competitive. We are having to subsidise it as a new immature technology. The costs of onshore wind have come down significantly. Although the nuclear deal is competitive, onshore wind is a very cost-competitive, low-carbon generator in comparison with nuclear. People often think that onshore wind is not cost-competitive, but when one considers the carbon costs, it is becoming very cost-competitive.
It has taken many people many years to get the policy to this point. I warmly welcome the announcement that has been made by the Secretary of State. Will he join me in acknowledging the contribution of people such as the late Malcolm Wicks, a former Member of this House, in getting the policy to this point? Does he also share my view that we need urgently to develop the other sites that have been identified for nuclear development in this country? Will he consider publishing a critical path development strategy to establish how and when those other sites will be developed?
It is right that the hon. Gentleman mentions the late Member of this House, Malcolm Wicks. He was respected on both sides of the House. I believe that he was an Energy Minister twice. He was respected by officials in the Department who worked with him. He played a role in this policy and it is right to mention him.
The hon. Gentleman also asked whether I would publish a new plan. We already have a lot of plans involving a lot of nuclear power stations. I do not want to anticipate what will come next quite yet, but we are on the way.
May I join other Members in welcoming the Government’s determination to make up for a decade of neglect by the Labour party and to ensure that we can keep the lights on? Will the Secretary of State confirm that there is a lot of international interest in Britain’s nuclear energy programme? However, will he also confirm that no matter which country takes an interest, it is the National Grid that will have the ultimate responsibility for any new nuclear reactor?
I am grateful for the hon. Gentleman’s question, and he is right to say there is a lot of international interest, as I saw on recent trips to Korea, Japan and China. Right hon. and hon. Members will also know about interest not only from France, but from north America, including Canada, and Russia. I am not sure, however, that that international interest all depends on National Grid because I think a lot of the work depends on my Department and the Government. National Grid has a critical role, but the negotiations were done by my Department.
Earlier, the Secretary of State reflected on why there has been a delay in building new nuclear. When I was shadowing his position, I was approached by nuclear companies who asked about political commitment in this country. I gave resounding support from the Labour party, so I think the dithering came from his side. While he talks about a 35-year plan and a power station that will open in more than a decade, does he still advise my constituents to put a jumper on when they cannot pay the bills?
The hon. Lady demeans herself because she knows I did not say that on “Newsnight” recently. More importantly, she is not taking responsibility and neither is the Labour party. She may not know this, but this is the first time the Liberal Democrat party, or its predecessor, has been in power in peacetime for about 90 years, so blaming my party for not delivering on nuclear power takes some cheek.
I welcome today’s statement and hope this is the start of a series of investments in new nuclear power stations. Does the Secretary of State agree that we should keep an open mind on breakthroughs in new technology, and particularly smaller reactor types that might suit sites such as Dungeness in my constituency?
The hon. Gentleman is a doughty champion of Dungeness, and it may have a role to play in the future. I cannot see beyond current plans, but perhaps some of the new technology we have heard about could be part of such a role, although he knows I cannot commit to that today.
What the Secretary of State has announced is for the future, but his energy policy for today is a shambles. He is recommending that people either wear pullovers or shop around, but if they shop around they find energy prices rising by about 10%. What will he do about those cartels? He should not blame the previous Labour Government because he is responsible now.
We are responsible, and we are sorting out the cartels that we inherited from the previous Government. The big six were created by the Labour party’s failed reforms of the electricity market, but because we have been deregulating and improving competition, the hon. Gentleman’s constituents have more choice. He does his constituents a disservice if he does not explain that they no longer have to stick slavishly to the big six, and that there are 15 independent suppliers. I thought he would want to help his constituents by recommending that they shop around.
I congratulate my right hon. Friend and his colleagues and officials on this historic and incredibly important achievement. Taken together with the more than doubling of renewable electricity generation in this country since 2010 and the huge interest in developing carbon capture and storage, does this nuclear renaissance not show that the market reforms he has championed have been exactly what investors have required to invest in the plant that our long-term energy security requires?