No news here – EDF doesn’t pay for something again

Something a bit odd is happening in Somerset, and I don’t mean that a new series of Midsomer Murders has been commissioned (I rather think it is set in Somerset, but I’m not sure…). No, the oddness relates to the community bounty promised upon the eventual arrival of Hinkley C nuclear power station in West Somerset.

You will recall, no doubt, the excited announcement by Michael Fallon last year; residents of the local authorities around the plant would be receiving, in addition to retention of the business rate, around £1000 per megawatt hour for up to forty years once the plant was producing power. That might amount to some £128 million all in, which is not bad going at all for cash-strapped local authorities. The previous year, EDF had announced that they would be lavishing some £64 million on local communities to get the project going. So, presumably, like the £5000 per installed megawatt that onshore wind developers are committed to provide for communities (provided that nice Mr Pickles lets them build any) and the 1% of revenues fracking well companies will have to donate to communities if they consent to a well and it actually produces anything, nuclear developers will also be supporting local communities.

Well, not exactly, as it turns out. Pretty much all the money that EDF have provided so far has gone on things that benefit…er…EDF – like widening access roads and so on. And, so I understand, the company has flatly refused to have anything to do with developer benefits subsequently. And following the strong hand DECC played in the negotiations throughout, flat refusal was indeed how it turned out. Only someone had to stump up the community benefit money after Michael Fallon’s possibly injudicious announcement. I am also told that further negotiations with Treasury have proved fruitless.

There have been some suggestions that the lucky authorities who might otherwise benefit from the community payout will share the undoubted bounty of the promised business rate remission. But since the plant itself will be built entirely within the West Somerset district boundary, it is this local authority who will get the whole lot. Other authorities will get nothing, even though they will get a lot of the effects coming their way. West Somerset is understandably reluctant to pass up the equivalent of a large lottery rollover win, so that avenue looks to be closed. The Treasury has now apparently told DECC that they are on their own and that any community benefit will have to be paid out of departmental funds, unless they can get EDF to cough up, which of course they can’t.

So there we are: cash strapped DECC likely to be paying out £128 million for the developer (who will pay virtually nothing in community benefit) over forty years, and local authorities in the area still left a little unclear about how this will all happen. The only good part of this sorry story is there is quite a long time to go before they will have to pay anything out. And perhaps someone will have found some money under a stone by then.

Rented homes and energy efficiency: a sad tale of intention and action

Lost in the mists of time (or 2011, to be precise) yet another Energy Bill found its way onto the statute books.  Most of us have probably forgotten what was in that bill, since several, rather more meaty examples of the species have come along since.  I haven’t, since I had the pleasure of sitting through an interminable series of committee meetings debating the finer points of the Bill. One such example was legislation requiring landlords to uprate the energy efficiency of their properties to a specified level by 2018 or face being unable to let them out, providing that the cost of the improvements would not be disproportionately burdensome. Some of us at the time thought that the 2018 date was a bit far in the future, but generally, the proposal had strong all party support and passed into law.

But, and there always are buts, the proposals required some secondary legislation to come to pass. Not least a specification of what energy band those landlords would need to attain, and what limitations on landlords’ expenditure would be regarded as ‘reasonable’. Furthermore, there was a question, which the committee at the time seemed to think would not be a problem, but the wording of the legislation later demonstrated otherwise, of what properties exactly would be covered by the new requirement? Would it just be where landlords were renting out an entire property to a tenant and would therefore obtain one energy performance certificate for the whole property? Or would it include the probably more numerous instances where properties were being let to more than one tenant – divided properties or multiply occupied homes?

Well, here we are three years later, and wooo, the first of the ‘buts’ has eventually been made into an ‘and’. At the end of July, the Department has finally got round to producing a consultation paper on how the proposals in the Bill will actually be implemented. You might have missed it by going on holiday, but it does mean that secondary legislation will now be prepared before 2018 is actually upon, us, but only just. And the good news is that the Department has set out the level of attainment that will be expected.  Landlords will have to improve their properties up to band E – not great, but since private rented properties are disproportionately to be found at the very lowest of the energy efficiency bands, in itself a real advance.

The second of the ‘buts’, however, remains firmly in that box. The Department has essentially bottled it as far as making the proposal into anything like a comprehensive measure covering all rented properties, and is proposing that the legislation only covers whole house lets. This means, not to put too fine a point on it, that the majority of properties will probably now entirely escape the requirements of the legislation. And if you are a prospective tenant looking to rent just part of house, you can be assured that your dwelling will remain just as draughty and fuel inefficient as, statistically at least, it will always have been. This wasn’t the intention of the legislation and I can only think that someone, somewhere has succumbed to a lot of pressure from some significant interests to drop the idea that the new laws might actually work properly.

I’ve been trying to get this omission plugged for some time now and I recently put a mini bill into the system with the specific aim of placing words onto primary legislation that ensures that all lets have to be included in any minimum standards programme. Unfortunately it is very unlikely to make any progress, so it is really down to the Secretary of State to change his mind about the omissions in the proposals for implementation. If you see him over the next couple of weeks, perhaps you can mention it to him…

This article first appeared in Business Green

Down with reshuffles!

Rather a lot has been written about the recent Government reshuffle, most of it of the ‘who’s up/down/in/out’ variety. I don’t want to add to that, but I do want to have a brief last word on the process, and what better Department to focus on for that than the Department for Energy and Climate Change. That Department has suffered quite a grievous loss with the departure of Greg Barker. I have had my disagreements with Greg over the years on a number of his policy directions, and one of his main initiatives, the Green Deal, effectively lies in ruins as he departs. But overall I thought he was a great minister for the Department – he fought the DECC corner assiduously, cared passionately about climate change and its consequences, and was quite fearless in pursuing that agenda in government, often against the rumbling and grumbling about it all from many of his own side. He linked and defended the energy and policy priorities of the department on renewables and low carbon energy at a time when it would have been easier to capitulate to the siren voices (also often from his own side) suggesting that the whole process should be put in a bottle and floated out to sea.

But there are two points in this little paean that stand out. Firstly, that Greg came to his post having had a substantial record of commitment and interest in the subject beforehand, and secondly, he stayed in the same post for almost the whole term of the present government. That’s a two edged sword of course in that you often have to deal with the consequences of your own policy initiatives when they return to bite you and not your successor. But it is quite a simple idea that maybe if you are appointing Ministers to positions it would be good if they knew about or had some interest in what they were being tasked with beforehand. And an equally simple idea is that probably, far better policy outcomes are likely to result from square pegs being able to occupy square holes for an extended period rather than almost continuously being uprooted and jammed into some round hole somewhere else.

Certainly, neither of those two simple plans has been in operation just across the corridor from Greg’s erstwhile office. Since this time two years ago no less than four nameplates have been nailed to the Minister of State’s door: Hendry has given way to Hayes, who has given way to Fallon (with two other jobs to occupy him anyway) who has now given way to Matt Hancock, incidentally, all during a time when the brief to steer Electricity Market Reform through all its stages was of crucial importance. I would have thought that just catching up on the vicissitudes of that particular programme probably occupied the waking hours of both of Charles Hendry’s successors until, still immersed in trying to get to grips with capacity payments and Contracts for Difference, they were set free and packed off to pastures new. I’m sure both the new recruits to the Department will be hard working and attentive, but try as I might, I cannot find much of a trail of interest or knowledge about what DECC is doing, other than, perhaps that neither of them like wind farms very much.

But I also ought to say that this is not particularly their fault; all too often it is just how the system works. Posts are allocated and occupied as if they bear no relation to what they are supposed to be about, but instead simply signify (where I came in) who is up, or down, who is in or out, and who is just visiting on the way to somewhere else better and more ‘in’. That cannot help good governance or policy-making, or the welfare of the important Departments subject to the merry-go round.

So my final word on reshuffles is this: that there ought to be less of them. And that there ought to be more Greg Barkers, enabled to do a job in a Department that they value and allowed to stay there for long enough to make a difference in the way that for all his idiosyncrasies and occasional rushes of blood to the head, Greg undoubtedly did.