Labour and environmental groups say new safeguards for foreign investment are merely ‘window dressing’

This article is more than 4 years old

This article is more than 4 years old

Theresa May has been accused of backing down on security concerns about Chinese involvement in nuclear power after she gave the go-ahead to the £18bn Hinkley Point C plant following a six-week review.

The government insisted the new plant in Somerset was only being approved with “significant new safeguards” to make sure China and other foreign investors could not own stakes in British nuclear plants without UK government approval.

However, Labour and environmental groups said the new security measures were merely “window dressing” and “hot air” that changed very little about the project, as the price remains the same and the new security powers already exist in law.

Under the proposals, EDF, the French firm building the plant with a £6bn investment from a Chinese state nuclear firm, will not be able to sell on its ownership without permission. For future projects, the UK government will own a “special share” that means it will have a veto over owners if there are national security concerns.

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In a sign the new requirements do not appear to be overly stringent, both EDF and China General Nuclear said they were delighted by the approval, which they claimed will let them proceed with Hinkley and their wider plans for nuclear construction in the UK in future.

The Chinese are keen to proceed with a new plant at Bradwell in Essex in particular because it will be their own design built under the UK’s tough safety regulations, allowing the company to use it as a showcase to the rest of the world.

“We are now able to move forward and deliver much-needed nuclear capacity at Hinkley Point, Sizewell and Bradwell with our strategic partners, EDF, and provide the UK with safe, reliable and sustainable low-carbon energy,” CGN said.

“CGN and EDF have worked together in close cooperation for decades and this has laid a solid foundation for these three new nuclear projects. CGN looks forward to leveraging its 30 years’ experience in nuclear construction and operation and playing an important role in meeting the UK’s future energy needs.”

The shadow energy secretary, Barry Gardiner, said the government has “backed down with a whimper” over its security concerns about Chinese involvement, saying it had announced “new powers they already possess”.

He told Greg Clark, the business secretary: “They have claimed they introduced significant new safeguards into this package. The secretary of state already has such powers. Will the secretary of state acknowledge that he can prevent the sale of any element of critical infrastructure?”

John Sauven, the Greenpeace executive director, also said the government’s review “appears to have been a lot of hot air”.

“The prime minister has baulked at the political embarrassment of irritating the French and offending the Chinese. Consequently, even if EDF manages to get the technology to work, the UK will pay the price by saddling themselves until 2060 with an out of date, flawed and expensive technology,” he said.

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Clark, the business and energy secretary, said the new security restrictions were an improvement, claiming EDF would have been at liberty to sell its stake on without the revised contract.

His Department for Business, Energy and Industrial Strategy confirmed that this was the only new security requirement for Hinkley to proceed.

The controversial scheme in Somerset was approved six weeks after May unexpectedly placed the project under review, causing tensions with Beijing.

Following the review, the government is keeping a guaranteed price of £92.50 to EDF for every megawatt hour of electricity generated, despite concerns that is far higher than the market rate.

Chinese officials have previously given a series of veiled warnings that a decision by Britain to halt their investment in UK nuclear would be seen as a snub and would put at risk a supposed golden era of relations between the two countries.

The decision means Hinkley will be the first new nuclear reactor built in Britain in two decades.



Before an announcement in the House of Commons, Clark said: “Having thoroughly reviewed the proposal for Hinkley Point C, we will introduce a series of measures to enhance security and will ensure Hinkley cannot change hands without the government’s agreement. Consequently, we have decided to proceed with the first new nuclear power station for a generation.

“Britain needs to upgrade its supplies of energy, and we have always been clear that nuclear is an important part of ensuring our future low-carbon energy security.”

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The wider changes to the government’s approach to the ownership of critical infrastructure are designed to ensure fuller scrutiny for the purposes of national security.

This marks a departure from the more laissez-faire approach of David Cameron’s administration.

A government statement said: “Following a comprehensive review of the Hinkley Point C project, and a revised agreement with EDF, the government has decided to proceed with the first new nuclear power station for a generation. However, ministers will impose a new legal framework for future foreign investment in Britain’s critical infrastructure, which will include nuclear energy and apply after Hinkley.

“The changes mean that, while the UK will remain one of the most open economies in the world, the public can be confident that foreign direct investment works in the country’s best interests,” it said.

The French prime minister, Manuel Valls, tweeted that it was excellent news that the project was going ahead and that it would be a boost for jobs in France. The economy minister, Michel Sapin, said it was an “undeniable success for French industry” and would be “a big contribution to supporting employment in France”.

Jean-Bernard Lévy, the chief executive of EDF Group, said: “The decision of the British government to approve the construction of Hinkley Point C marks the relaunch of nuclear in Europe.”

Manuel Valls (@manuelvalls) Accord sur le projet Hinkley Point : une excellente nouvelle pour la filière nucléaire française et pour l'emploi dans l'Hexagone. MV

But the news was met with dismay by environmental campaigners, who had been given hope it would be cancelled when May placed it under review.



Greenpeace’s Sauven said the potential political embarrassment of scrapping the deal must have proved too great.

But he added: “This decision is unlikely to be the grand finale to this summer’s political soap opera. There are still huge outstanding financial, legal and technical obstacles that can’t be brushed under the carpet. There might be months or even years of wrangling over these issues. That’s why the government should start supporting renewable power that can come online quickly for a competitive price.”

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Caroline Lucas, co-leader of the Green party, said it was absurd and disappointing that the deal was to proceed when the government was reducing support for cheaper, safer and more reliable renewable alternatives.

“Instead of investing in this eye-wateringly expensive white elephant, the government should be doing all it can to support offshore wind, energy efficiency and innovative new technologies, such as energy storage,” she said.

However, business groups, engineers and trade unions welcomed the decision to proceed, saying it would create jobs and ensure a secure supply of energy.

Claire Jakobsson, of the EEF manufacturers’ organisation, it was a “relief to see Hinkley proceeding after months of delays and uncertainty”, but called for significant reductions in the price of electricity generated by future nuclear projects.

Brian Rye, acting general secretary of Ucatt, the construction union, said: “The go-ahead was vital for the construction industry, which desperately needed the confirmation of such a major project following a slowdown in the industry caused by the Brexit vote. It is also good news for the overall economy as it helps to guarantee the stability of our future energy supply.”

The French secretary of state for industry, Christophe Sirugue, told France Info the Hinkley decision was good news because it validated French industrial strategy to invest in nuclear. He said it would create 4,500 jobs in France. Questions remain over the difficult financial position of the French state-owned power company EDF, which will assume up-front costs, which some unions in France argue could jeopardise the firm’s survival.

Sirugue said the state had “taken serious account” of the concerns and would be reorganising and helping out the firm. He added that it was “extremely important” that the Hinkley project went ahead in terms of France “demonstrating our industrial savoir-faire” to the international market.

Timeline

November 2005

Tony Blair launches UK energy policy review.



May 2006

Blair declares that failing to take action on the UK’s nuclear plants would be a “dereliction of duty”.



July 2006

Government gives the green light to new nuclear power plants. The industry secretary, Alistair Darling, says the private sector will have to “initiate, fund, construct and operate” the nuclear plants.



February 2007

The UK chief executive of French state-owned EDF says Britain will be cooking its Christmas turkeys on new nuclear power by 2017.



August 2007

Safety checks begin on the EPR (European pressurised reactor) power plant design that will be used at Hinkley.

January 2008

The government says the first new plant will be completed “well before 2020”.

September 2008

EDF buys British Energy, a key player in the UK nuclear industry, for £12.5bn.

October 2010

UK government names Hinkley Point as one of eight candidates for a new power station.

October 2011

EDF submits 55,000-page planning application for Hinkley Point C.



December 2011

First new reactor will not be operational until 2019, says government.



November 2012

EDF awarded first new site licence for a UK nuclear power station in 25 years, at Hinkley Point.

October 2013

Government announces subsidy deal for Hinkley Point, which will now not produce power until 2023, according to EDF.

May 2014

European commission approves state aid for Hinkley Point and costs the plant at £24.5bn.

October 2015

EDF signs Hinkley development deal with China General Nuclear Power Corporation, which will provide one-third of the cost, now estimated at £18bn.



March 2016

Finance chief of EDF quits, amid fears Hinkley Point C could jeopardise the company’s financial position. EDF’s chief executive promises long-delayed final investment decision will be made soon.

28 July 2016

EDF decides to press ahead with building Hinkley Point C. But government takes everyone by surprise by postponing its final decision on the project until the early autumn.

15 September 2016

Theresa May finally gives £18bn project go-ahead, but adds “significant new safeguards” to ensure national security.