[Mr Philip Hollobone in the Chair]
I beg to move,
That this House has considered the future cost of Hinkley Point.
I am delighted to serve under your chairmanship, Mr Hollobone.
To start with, may I praise the Minister for coming down to Hinkley Point with the Secretary of State and having an excellent visit, which went down extremely well at C station? This afternoon, I am delighted to celebrate the progress of Britain’s first nuclear power station in a whole generation. Hinkley C is absolutely smack in the middle of my constituency and it is important to the local economy. Indeed, the importance of its development cannot be overerestimated. It is a huge project that has already cost—I say this so that people are aware—billions of pounds.
The subject of my debate—the future cost of Hinkley Point—has raised eyebrows, including, I think, those of the Minister. I want to make it clear that the investment will pay substantial dividends for decades to come. Hon. Members should need no reminding that every penny of the price to complete Hinkley is coming from the developers. The exact amount, believe it or not, is £20 billion, plus an additional £300,000; I do not know what the £300,000 is for, but there you are.
There is no public money at stake; the venture is financed with EDF’s euros and a small portion of Chinese yuan. The risk takers are two of the world’s biggest nuclear players. They have the backing of their own Governments, and they are big enough and robust enough to battle it out with the best—and, importantly, win. Hinkley is definitely a win-win construction for us in Bridgwater and West Somerset.
Hinkley is already providing thousands of new employment opportunities and sowing the seeds for world-class nuclear training at Bridgwater and Taunton College; the Minister was able to see a small part of that. Hinkley is attracting talent from all over Britain, but EDF is rightly proud of the fact that so many of its keen young recruits have been found within just a few miles of the site. Perhaps that is not surprising, as there has been a nuclear power station at Hinkley Point for 61 years. Entire generations have lived with, and worked in, Hinkley and learned to rely on it. Nuclear power commands enormous respect in my part of the world; it is in our blood. We know that it makes sense, now more than ever before.
The necessity of additional electricity generation in these islands is not in question. All our remaining coal-fired power stations, and there are only seven of them now, are carbon-guzzling—dare I say it? I mean this in the right way—museum pieces that we have agreed to commit to history over the next six years.
Most of the UK’s electricity is produced by burning fossil fuels, mainly natural gas. That is both wasteful and costly, particularly to the environment. Gas-fired power stations amount to 40% of UK power generation. Wind and solar already provide roughly 28% of the nation’s needs; that is, of course, whenever the wind blows and the weather allows it. Our old fleet of nuclear power stations appear to be trailing, as they supply just 19%. That leaves a gap that can be filled only by importing power from France and the Netherlands via cables, which is hardly ideal when we stand on the brink of Brexit. In other words, we are not running on empty, but we need some quick fixes to make sure the lights stay on.
The golden advantage of nuclear power is that it produces electricity even if the sun does not shine and the wind stops blowing—surprise, surprise. It also involves an enormous number of people—in designing, building, maintaining and developing. Nuclear is a major national employer. It is a clean, green energy source. It is carbon-neutral. Nuclear is not cheap to develop, as it can take a decade to install, but it lasts for generations. Nothing in life is perfect, but in my humble opinion, nuclear power is pretty darn good.
What has happened in my constituency is nothing short of revolutionary, and I know that the constituency of my hon. Friend the Member for North Devon (Peter Heaton-Jones) has also experienced the benefits. Bridgwater used to be an avoidable town in many ways, with a lot of factories making things such as cellophane, with its unforgettable smell—I know you have never suffered it, Mr Hollobone, but I can assure you that it was interesting—as well as water pumps, believe it or not, and, yes, we were the home of bombs. The material for the famous bouncing bombs used by the RAF in the dam buster raids was actually made in Bridgwater.
Our town is used to getting its hands dirty and it has a highly skilled workforce, which, of course, my hon. Friend the Member for Wells (James Heappey) knows so well; he is my next-door neighbour. Then, however, we had severe recessions. The bomb factory closed and the cellophane plant shut; the little industries began to thin out and melt away. I invite all hon. Members here to come and see Hinkley C. It is quite remarkable. It is no exaggeration to say that the area is booming. The shops are busy; the big stores are arriving; there are new hotels and new housing; and there has been a restoration of pride and purpose.
Most importantly, there are jobs—lots of them. They are good, skilled, long-lasting jobs. There is also a fully functioning national college that has developed to teach new nuclear skills to the next generation. Much praise is due to the present and past principals of Bridgwater and Taunton College, who have helped to put in place a world-class education programme and forge links with major employers.
At last, there are proper careers in an industry that may have been around for 60 years, but has come back to Bridgwater with renewed vigour. That is the reality. That is what can happen; and it will continue to happen when the reactors are completed. When they are switched on, we will see the proof of what we have achieved.
At that point, Hinkley C will meet up to 7% of all of Britain’s electricity needs. That may not sound much, but let us put it in perspective. Hinkley will be able to power 299 million light bulbs at once; it will also allow 58 million people to watch “Bake Off’ at the same time, hopefully—boom, boom!—without a soggy bottom. [Interruption.] I know—sorry. If any teenagers arrive home in the middle of the show, Hinkley will still be able to fill up the batteries of 640 million iPhones without any bother at all.
I am, as Members have probably gathered, a nuclear enthusiast. I have watched the progress of Hinkley throughout 17 long years in Parliament—they have been long—during which time EDF developed its plans, invested in detailed research, and patiently consulted and worked with local authorities, especially Sedgemoor District Council. EDF has had its critics, but nobody can fault its extraordinary patience over a very long period. It has waited and not been frustrated by Prime Ministers, past or present, who could or would not take the decision to go nuclear—and they all did that.
By the time the Government gave the green light, EDF had actually sunk £2 billion of its own money into the project, which might have been cancelled overnight. However, that is the way that companies such as EDF work; they are in it for the long term. Planning a new power station takes years; building it will take a decade.
Understandably, EDF is still learning lessons about how to build more efficiently. However, if one were to consider the progress already made on the site in less than three years, one might wonder if any additional improvements were possible. Believe it or not, EDF is using 3D modelling on a massive scale, to take the worry out of getting major engineering decisions spot-on. It has already sunk 235,000 steel bars into concrete, and the best way to ensure that those bars are in precisely the right place is by using 3D modelling. Also, major parts are prefabricated away from the site, to minimise disruption and increase productivity. As a result, EDF has done the digging 15% quicker than anywhere else, laid concrete 30% faster, and actually cut out mistakes, which is a remarkable achievement.
My hon. Friend is making a very good speech. Hinkley Point is in his constituency, which neighbours mine, and I have also been to see the site. I can say just how impressive it is; everything that he has described is correct. Does he agree that Hinkley Point not only generates vital baseload electricity, but boosts the local economy in our constituencies and those of other hon. Friends who are here—and not only during this construction phase? When it is operational, that will continue. The boost to employment and the local economy in North Devon and throughout the area will be considerable.
I thank my hon. Friend for that intervention. He has represented his constituents so well on so many issues, and we join on this. I am grateful to him for his thoughts. I am also very grateful to my hon. Friend the Member for Wells, who has supported Hinkley since he has been an MP. He has made an enormous contribution; indeed, both my colleagues have.
The point my hon. Friend the Member for North Devon makes is absolutely right. The opportunities for learning and gaining skills in our area are really quite phenomenal. Exmoor is perhaps not—dare I say it?—the richest area, but it has already benefited from Hinkley Point, even though it is a long way away. That means that we are able to spread out the goodies of Hinkley Point, not only to our neighbours, but to a much bigger area.
I give way to the hon. Member for Wylfa.
The hon. Member for Ynys Môn, actually, although Wylfa is in my constituency. I congratulate the hon. Gentleman on raising this issue. Regarding community benefits, he is right to talk about the construction jobs, the high skills, and the longevity of the project. However, the community has had an upheaval, and it is important that community benefits come from Government. It is good to see the right hon. Member for Sevenoaks (Sir Michael Fallon) here, because he made a statement in July 2013 about a mechanism to ensure that happens. Does the hon. Member for Bridgwater and West Somerset (Mr Liddell-Grainger) agree that the Government must restate that commitment, so that the host communities in his constituency and mine benefit for generations to come?
The hon. Gentleman has made an enormous contribution to the nuclear debate, and I am grateful to him. He is absolutely correct. I am also delighted to see my right hon. Friend the Member for Sevenoaks (Sir Michael Fallon) right hon. Friend the Member for Sevenoaks in his place.
The hon. Member for Ynys Môn (Albert Owen) is quite right: at the end of the day, this is a team effort. No nuclear area is doing anything other than what all nuclear areas are trying to do, whether in Dungeness, Wylfa, Hartlepool, or anywhere else. We are trying to work together to spread the benefits of nuclear across the United Kingdom, and we have to get that right for the communities. Hinkley is the first of these projects, but that does not mean it will be the last: Sizewell is next, then Wylfa, and then we will go wherever we are going, whether that is Sellafield, or somewhere else. The Government have to make a decision, as I will discuss a little bit later, and I am sure that the Minister will pick up on this exchange. We need a clear understanding of the business rates over the long term, as there has to be some mechanism that brings the benefits of the nuclear production of electricity back to the local community.
Just two weeks ago, I had the opportunity to meet a representative of one of the power companies involved in this project, and he outlined the benefits to the economy in terms of jobs and the pound in your pocket. Does the hon. Gentleman agree that, as the hon. Member for Ynys Môn (Albert Owen) said, this is about involvement with the community? It is not a question of them and us. Rather, it is about how companies involve themselves with and endear themselves to communities, and encourage them. It is obvious from the presentation I saw that there will be great benefits to the local economy, but this is about community involvement and making sure that communities benefit directly.
I thank the hon. Gentleman; I know this is not his area of expertise, but he is absolutely right. I reiterate that this is a team effort, and the whole of the United Kingdom must benefit from it. It is iniquitous that we are buying electricity from France and the Netherlands; we should be producing our own electricity for our own people. The jobs and skills are interchangeable: the skills that a person learns as a steel fixer, a concrete pourer, an electrician, or anything else at Hinkley can enable them to go anywhere in the United Kingdom. Those people are trained to the highest level of engineering that we can achieve. The only thing that they cannot do is welding the nuclear flask, but they can do everything else, and that is important for our area.
It is a delight to contribute to my hon. Friend’s debate, as he contributed to my debate on broadband yesterday. There is huge opportunity in Somerset for upskilling of individuals, and for businesses to upgrade their capabilities in order to contribute to the nuclear supply chain. It is important that those individuals and businesses are able to access the Hinkley programme, but does my hon. Friend agree that it is equally important that the industrial strategy for our region helps to deliver follow-on industries in Somerset and the south-west, so that those skills can be employed within our region, rather than seeing them move on with the nuclear caravan when the nuclear new build programme moves elsewhere in the United Kingdom?
I thank my hon. Friend; he has been an incredible advocate for nuclear, and has worked tirelessly. This has not been easy, but my hon. Friend is absolutely right that we are creating something for the future, and it is going well. The Minister is fully aware of that, and of how much work has been done locally, both in North Devon and in Somerset.
For every nuclear job, we must create a non-nuclear one. My hon. Friend the Member for Wells (James Heappey) covers Burnham and Highbridge—it is in his constituency, and on the border of mine—and it is important that we create jobs in Morrisons distributions, Wiseman’s milk, Yeo Valley dairy products and Mulberry handbags. The development at ROF Bridgwater in Puriton, the bomb factory, is 626 acres of industrial space, right on our joint border. We are making strides to ensure we keep that legacy going for generations to come. The Minister has been briefed on that, and is fully aware of it.
Some 95% of everything at Hinkley C is delivered right on time, which is an amazing statistic for an engineering job on this scale, and lends credibility to EDF’s belief that the next power station built in the UK can be done 20% quicker and cheaper than Hinkley. That is a phenomenal statistic. The cost of Hinkley C, as far as the British Government are concerned and as we all know, is locked into something called a strike price: how much we are prepared to pay for every volt generated. The price was agreed several years ago, and some people argue that it is high, but Hinkley was never planned to be a one-off. EDF is already well advanced with plans for Sizewell C, on the Essex coast, and my hon. Friend the Member for Wells has been a great advocate for that as well. That development will be, in effect, Hinkley C mark 2. It will offer the same job opportunities, as well as economies of scale, supply, licensing, and design. Those savings are likely to be reflected in the price that EDF receives for the electricity produced, but the financial risk—and this is important—remains primarily EDF’s, not ours. The experience of Hinkley C in Somerset continues to be critical for Britain’s nuclear future.
Hinkley could not have proceeded without the intelligent local authority support of Sedgemoor District Council, which my hon. Friend the Member for Wells and I share. It was the council that negotiated the generous compensation from EDF, and we know that that there will be a community financial benefit when the plant starts generating power, because the Government have already promised it. It would be helpful if the Minister could provide some pointers about that; I realise that it is early days, but a bit more flesh on the bones is always helpful from any quarter, and the council and many others—including my hon. Friend the Member for Wells and I—would be very interested to hear about it. It was Sedgemoor that insisted on sensible traffic management, and Sedgemoor that smoothed out the planning obstacles without, most importantly, surrendering proper oversight. As I hope my hon. Friend would agree, Sedgemoor has been an exemplary council.
My hon. Friend assents from a sedentary position. Sedgemoor has significant experience, which all other English councils will wish to imitate when they deal with nuclear plants in the future, and I know that Sedgemoor would be happy to help. I just wish that Somerset County Council had the same enviable reputation. The unions at Hinkley tell me that there is now real concern about Somerset County Council’s financial problems and the impact those could have on Hinkley C. I realise that this is not the Minister’s direct responsibility, but it is important that he hears it. Somerset County Council is severely stretched; actually, it is almost broke. It is about to make savage cuts to essential public services, and it cannot afford—so it says—to finance new schools. There are also worries about threats to the learning and skills service. Hinkley’s job opportunities are attracting families to settle locally, which means a housing boom for our area and our county, but it could mean a crisis if there are not enough schools or public services.
I know that the Government are being lobbied hard by Somerset County Council, and badgered by its leader, to create a new unitary authority. This is not the time or the place to analyse what has gone wrong, but Somerset County Council’s attitude, I am afraid, is not helpful. It is already blaming Sedgemoor District Council for allowing too many new houses, which is absolute madness. As the Hinkley unions emphasise, where are the thousands of nuclear workers expected to live? That point has been made in this debate by hon. Members from all over the UK. I do not believe that incompetent financial management of the county should put any part of Hinkley’s future at risk. That would be bad for the United Kingdom, as the economic rewards of Hinkley are far too important to us all.
I have just returned from China, which I visited with a group of colleagues from the all-party parliamentary group on nuclear energy. We were guests of EDF’s Chinese partners, CGN. Its engineers have worked hand in hand with EDF to develop as a major nuclear player, as well as develop its own reactors, and we were taken to see the working EPR in Taishan. It is very good; it does the job that CGN set out for it to do. While we were away, we heard the sad news that Toshiba was abandoning its plans to build a new reactor at Moorside, near Sellafield. We know that Toshiba has been facing financial problems, but the potential loss of any new plant anywhere in the country is obviously serious.
The future cost of Hinkley, and all nuclear installations that follow, will be high. In the specialist field of energy production, quality, long life, efficiency and safety will not come cheap at the moment, but they will become cheaper. I thank the Minister for all his support.
It is, as always, a great pleasure to serve under your very competent chairmanship, Mr Hollobone, as I have many times. I hope that the rest of the debate will not be too stressful for you, given the spirit in which my hon. Friend the Member for Bridgwater and West Somerset (Mr Liddell-Grainger) intends it, for which I thank him. He has consistently and regularly demonstrated a keen interest in the Hinkley Point C project—formally, at the meetings we have had together, and on visits, and more or less every time I have a cup of tea or coffee in his immediate vicinity. I congratulate him on that.
I also congratulate the other hon. Members who contributed to the debate: my hon. Friend the Member for North Devon (Peter Heaton-Jones), the hon. Member for Ynys Môn (Albert Owen)—it took some time to learn that constituency, but I think I know it now—and, of course, the ubiquitous hon. Member for Strangford (Jim Shannon).
My hon. Friend the Member for Wells (James Heappey), who is also a regular contributor, taught me something that conditioned my view of Hinkley Point and other projects when I had just taken on the portfolio. He told me about his fear that the local content would comprise, basically, a sandwich van at the end of the site. I say that because my hon. Friend for Bridgwater and West Somerset talked about wet bottoms.
I shall have to check Hansard. I appreciate your leniency, Mr Hollobone—I am sure Mr Speaker might have thought that was unparliamentary language, but it was not intended to be so.
The serious point I am making is that in all my dealings with EDF, and in all my visits down there and visits to suppliers, I am always keen to stress the point made by my hon. Friend the Member for Wells about the local supply chain, and the fact that these are real jobs. That reflects the points made about the national impact, which we always have to think about.
I am proud to be part of this Government and I asked for the nuclear portfolio—not because it was part of my general energy portfolio, but because I believe it is a brilliant industry in its own right for the future. It has everything that we look for in our industrial strategy: quite apart from the energy side, the industry creates good-quality, high-level employment, and that energy, if produced in bulk—obviously, not hundreds and hundreds of these, but more than one—can reduce the price by 30%. It also has supply chain and export, and is high tech. Before we even get on to the green point, the baseload point and all the other things that are so important, it has a lot going for it.
That is why I was pleased when the Secretary of State and I went to—I must warn you, Mr Hollobone, that this could be difficult for me to pronounce—Trawsfynydd, in Snowdonia in north Wales, to launch our nuclear sector deal. The hon. Member for Ynys Môn nodded, so I am pleased I got the pronunciation right. It has a great future. We have mentioned different parts of the country today, including north Wales and Wylfa, which are important.
Indeed, the hon. Gentleman and I have discussed community benefits for Anglesey. Obviously, the community benefits for Hinkley Point are further down the line because the development is well under way. Those are important community benefits and it is right that those decisions should be made locally. Of course, that can lead the Government into lots of problems, because local communities do not have a consistent view, depending on area.
The question I raised regarding the announcement made in 2013 by the then Department of Energy and Climate Change still stands, and I know that the communities of Bridgwater and of Anglesey are concerned that nothing much has happened since then. Will the Minister reiterate his commitment to that formula so that the Ministry of Housing, Communities and Local Government and the Welsh Government can work with his Department, the mechanism can be put in place and, when the stations are generating, the communities can get the full benefits?
I am happy to confirm that. I have already met with one chief executive and one lead councillor from the hon. Gentleman’s area, but I would, of course, be delighted to discuss this with him at any time.
The main point today, which my hon. Friend the Member for Bridgwater and West Somerset expressed so eloquently, is how important the nuclear industry is as an industry in its own right to local economies and to the national economy. As far as I can see, EDF is doing an excellent job. There are many British and Northern Irish employees, some of whom I met down there, of different skill levels, and I was pleased to see the number of young girl apprentices, which is also part of our nuclear sector deal.
I am not at all complacent. I think the deal that was stuck at Hinkley Point C was sensible from the taxpayer’s point of view, as my hon. Friend mentioned, because it completely de-risked the taxpayer. We can do other interesting deals in the future for nuclear. At the moment, nuclear power is roughly 22% to 24% of the power output that we need. By 2030 to 2040, as the original power stations are decommissioned or reach the end of their life, that will drop with Hinkley to—again, these are very rough numbers—5% to 7%. There is a big gap.
Does the Minister agree that the true value—that might have been a better title than “cost”—of the Hinkley project will not be known until we see some of the cost savings that will be realised at the second station that EDF has built, and indeed in the sequencing of stations that will be built after that?
My right hon. Friend makes an excellent point, with which I fully agree. On my first visit to Sellafield I was shown the original Calder Hall reactors that were opened in the ’60s. The then Minister said that the electricity would be so cheap that it was not even worth metering it. We have moved away from that, but I believe that, in the long term, this will be low-cost power. As everyone knows, the up-front costs are significant. After that, the marginal costs are comparatively low. As long as there is a reasonable way to finance the up-front costs—which, as the technology becomes more modular and more commoditised, we will be able to estimate more accurately—I totally agree with my right hon. Friend’s point.
I am pleased to respond to today’s debate. I will not forget Hinkley Point C, which is one of the most significant visits I have ever made. It is calculated that 64% of the construction contracts there—it is a huge project—will go to UK companies, and that £4 billion will go into the regional economy over the lifetime of the project. We will not forget that; it is very important to us. I am extremely grateful to my hon. Friend the Member for Bridgwater and West Somerset for bringing the debate to the Chamber.
Question put and agreed to.