“Leave Hinkley to the hedgehogs. This debacle needs to be taken in hand”

“Environmental protections on EDF’s troubled Somerset construction site are excellent, apparently. Very little else about the project is.

Have you heard about the terrific bat houses and hedgehog tunnels down at Hinkley Point in Somerset? Energy minister Andrea Leadsom has been to inspect them herself and raved about them last week to a select committee of MPs. They were evidence, she suggested, of the depth of commitment of French firm EDF to the £18bn nuclear power station due to be built on the site.

Well, maybe. Talk of bats and hedgehogs at least provided some relief from the familiar crop of Hinkley news. French economy minister Emmanuel Macron said he was “fully behind” the project but EDF’s unions confirmed that they weren’t. Jean-Luc Magnaval, secretary of EDF’s workers’ committee, told the BBC that the unions “have reservations about several aspects of the project: organisation, supply chain, installation and procurement”. That’s a long list.

Meanwhile, EDF Energy chief executive Vincent de Rivaz, appearing before the same committee as Leadsom, had to adopt a humbler tone than on his last outing two months ago. Then he had promised a final investment decision “very soon”; this time he wouldn’t speculate about a date.

This farce – which has been running since last October, when the final sign-off was due within weeks – could yet roll on and on. The UK government is disinclined to set a deadline: it’s a “commercial decision” for EDF.

Meanwhile, the current French government could have a radically different shape this time next year – there is a presidential election in 2017 and the incumbent, François Hollande, is the least popular leader in modern French history. French union opposition to Hinkley Point appears entrenched and the workers’ representatives have six seats on an 18-strong board.

In theory, management and government can proceed regardless; but to embark on an £18bn venture with a divided boardroom would invite trouble down the line. That is especially so when you remember EDF’s last finance director, Thomas Piquemal, resigned over concerns that Hinkley could threaten the company’s future.

The best thing the UK government could do at this point is to stop and consider whether the obstacles facing Hinkley are simply too big.

Nervousness in France is understandable. EDF’s two current attempts to built a European pressurised reactor – the model to be used at Hinkley – are agonising; one is four years late, the other nine years. And the financial arithmetic was always challenging. Hinkley could take 10 years to build, and the owners receive nothing during the construction phase; the cash only arrives when electricity starts to be generated. And, while the returns on capital under the 35-year contract are theoretically enormous, the penalties for failure to hit a 2029 deadline are stinging, and ratchet up.

That is why the UK government had to make the 35-year contract so generous – struck at almost three times today’s wholesale price. That contract now looks to belong to another era given the subsequent fall in the oil price, and thus energy costs. The only weak support holding Hinkley in place is its capacity to provide 7% of the UK’s electricity in a low-carbon fashion.

But there are other ways to meet the legally binding emissions targets. Offshore wind is expanding with no Hinkley-style fuss, and its costs are falling. More importantly for the UK’s requirement for secure baseload supplies, other builders are waiting to pursue projects that use different nuclear technology.

In theory, planning and appraisal can continue in parallel; in practice, confidence in the UK’s commitment to its new-nuclear programme will drain away.

There is not – yet – a crisis in UK energy policy because it is always possible to build a few gas-fired stations to avert an emergency. But the Hinkley show is becoming an embarrassment. The project is expensive, uses unproven technology and its builder is a disunited and over-borrowed company that requires constant financial assurances from an ever-changing cast of politicians.

The UK government should set EDF a deadline and be ready to enforce it. We can do better – much better – than Hinkley.”


Ottery over-55s homes rejected by planning inspector

“A ‘highly unpopular’ and ‘damaging’ 52-home development plan in Ottery has reached the end of the road as an appeal against its refusal was dismissed.

An application by Blue Cedar Homes to build at Slade Farm received 410 formal objections and was rejected by East Devon District Council last year in a move hailed a ‘victory for people power and common sense’. …

… Blue Cedar specialises in providing homes for over-55s and its plans included provision of ‘age-restricted’, open market and ‘affordable’ properties at Slade Farm. …

… In his report, planning inspector Jonathan Manning cited several reasons for dismissal, including the harm it would cause to the character of the area, loss of the most versatile agricultural land and the fact it does not represent sustainable development.”


Manchester: devolution finance black hole

“Andy Burnham, who wants to be Labour’s Manchester mayoral candidate, has called on George Osborne to take action over what he called a £1bn black hole in the northern powerhouse initiative.

Analysis of public services finances across Greater Manchester has found that a £1bn shortfall would emerge over the course of this parliament. Central government grants to the region’s 10 councils will fall by £836m between 2015 and 2020, and Manchester city council is set to lose £163m by 2019/20, according to Burnham.

The region’s NHS trusts face a combined deficit of £115m, the budget of Greater Manchester police will fall by an estimated £34m over the five years, and post-16 education funding has been cut by £2m this year.

Burnham told Osborne: “You have one more budget before the new mayor takes office to fix this hole in our roof and balance the books. Your legacy as chancellor can go in two ways: as the one who truly changed the fortunes of the north; or one who perpetrated the most elaborate con in British political history. I urge you to choose the former and work with me to make it a success.”

The former health secretary said that given the north’s overcrowded roads and poor rail links, it was impossible to conclude that Crossrail 2 – which would run diagonally across London – was the UK’s highest strategic transport priority.

“I call on you to look again at this and urgently allocate the funding for a modern, high-speed rail system linking the cities of northern England,” Burnham said.

“I am prepared to give you the benefit of the doubt and believe that your commitment to the north is real. But people here are not daft – they now want actions, not clever slogans.”

In his budget in March, Osborne committed £60m to develop an improved east-west rail link to reduce journey times from 50 minutes to about 30 minutes between Leeds and Manchester, as well as £75m to develop plans for an 18-mile road tunnel under the Peak District to cut journey times between Manchester and London.

However, funding has only been put forward to draw up plans rather than as any commitment to building either project.”


40 recommendations on devolution most of which the government ducks

Government Response to CLG Select Committee Report: “Devolution: the next five years and beyond”

Many, many recommendations, few of which the government is taking on board.

Worth the read.

For example:

“Recommendations 15 / 16:
for devolution to take root and fulfil its aims, it needs to
involve and engage the people it is designed to benefit. There has been a consistent very significant lack of public consultation, engagement and communication at all stages of
the deal-making process. This is due to areas having limited time in the run up to the 4 September deadline. The Government drove the first wave of devolution deals through
at a rapid pace (considered in more detail in the next section) which meant there was no opportunity for engagement with residents, or for residents to have their say on the principle of devolution or the framework of the specific deal proposed in their area.

Despite this, we believe that local leaders could have communicated more effectively and extensively with their residents about the deal process, the contents of the deal and how it would affect them. It should, for example, have been clear to any citizen what their elected leaders were seeking to secure for the area in negotiating a devolution deal with the government.

In addition, deals involving complex negotiations between national and local politicians do not lend themselves to public engagement However, from now on, efforts should be made to engage, consult and communicate with the public at all stages of the process—in the preparation of proposals, their negotiation and following agreement.

Strategies to involve the public may include citizens’ juries, public meetings and, within the NHS and local government, staff engagement sessions. Once a deal is entrenched and its reforms have had the chance to take effect, the public should be consulted on their experience of its practical effects.

We think it is too late to engage the public only once a deal has been agreed. While it is reasonable that the actual negotiations are not open to the public, steps should be taken to inject more openness into the process by publishing on the relevant authorities’ websites:

• Devolution proposals and the Government’s counter-offers, within a reasonable time of them being made;
• An outline of what is being negotiated; and
• Drafts of the deal, and the text of the final deal.

The Government should also publish the criteria it uses to assess and agree proposals so local areas can refer to these when drawing up their devolution bid. A similar level of transparency should continue to be maintained once the deal has been agreed.”(Paragraph 56)
(Paragraph 53)

and here is the government response:

“The Government agrees that devolution needs to involve and engage the public, and would see continued value in engagement once a deal has been agreed. Deals are iterative (as evidenced by the progress made by Greater Manchester) and the Government’s expectation would be that elected representatives in the local area should seek the views of their constituents through whatever means they deem appropriate.

The Government would expect devolution deals, negotiated between locally elected leaders and central government, to reflect what people in the local area want and need. Additionally, when establishing, or amending, a Combined Authority there is a statutory requirement to hold a public consultation, while local authorities in deal areas also remain subject to the Best Value Duty with its associated requirements around consultation related to commissioning in particular.

The Government does not share the Committee’s view that there should be assessment criteria to agree deals. This is because there is no blueprint for devolution proposals; the only stipulation is that the governance arrangements should be commensurate with the powers being devolved. All devolution deals are bespoke and will vary depending on the asks from local areas.

All of the devolution deals agreed to date include clear commitments from Government and local areas on implementing, monitoring, evaluating and ensuring accountability, and the text of all agreed deals has been published online. The Government is committed to continuing to publish deals as more are agreed.”


Devon Minerals Plan: inspector recommends more than 200 changes

It appears from the press release (link below) that the recommendation is that Straitgate Quarry should be reduced in size but the Inspector raised many issues about access and alternative sites to which he did not receive adequate answers.

Much centred on lack of consultation, and the amended report must now go out to public consultation again from August 1 to September 23,


Report from the Straitgate Quarry Action Group here:


HMRC misses out on £50m of stamp duty from Middle Eastern bank

Because it sued the wrong company … who were their lawyers?

HM Revenue & Customs has lost its bid to recover up to £50m in stamp duty from the sale of the Chelsea Barracks in 2007.
Three Court of Appeal judges decided that the tax office had pursued the wrong party for the tax.

The purchaser, a firm owned by the Qatar Investment Authority, had used a type of Islamic finance that meant a bank actually owned the property.

HMRC said it was “disappointed” by the ruling.

“The Court of Appeal ruling supports our view that SDLT [stamp duty land tax] is payable. We are disappointed that the decision makes that tax much harder to collect so we are considering an appeal,” HMRC said.

The judges’ decision is likely to reignite criticism of the complexity of the UK tax system, if HMRC itself can be caught off guard. It will also expose alternative financing arrangements to more scrutiny from tax campaigners.”