Hinkley Point: Chinese Investment

Monday 2nd November 2015 Lords Chamber

Question

14:45

Asked by

[Baroness Jones of Moulsecoomb]

To ask Her Majesty’s Government what assessment they have made of the employment and environmental records of the Chinese companies involved in developing Hinkley Point, and whether either company has been involved in developing nuclear weapons.

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, all companies operating in the United Kingdom nuclear industry do so in accordance with the stringent requirements of the United Kingdom’s independent nuclear regulators. These include environmental protections. Likewise, all companies are required to conform to United Kingdom employment law. China is a nuclear weapons state under the Treaty on the Non-proliferation of Nuclear Weapons. China General Nuclear, which will hold a minority stake in Hinkley Point C, is not involved in the development of nuclear weapons.

[Baroness Jones of Moulsecoomb (GP)]

I thank the Minister for his Answer to my Question. I am sure he is aware that there is a lot of concern outside this place about inviting China to be such a large partner in such a complex deal. If we take into account the fact that the Chinese imprisoned 300 human rights lawyers and activists just between July and September this year, we start to see the size of the problems. In addition, Members of Parliament have only another week to voice their concerns about the Bill. I feel that the whole thing is being rushed through.

[Lord Bourne of Aberystwyth]

My Lords, the noble Baroness is right to say that concern has been expressed about China’s involvement. As I have said, the Office for Nuclear Regulation regulates the security of civil nuclear programmes, including companies from overseas, and the security services will also be involved. As she will understand, there has been a long-standing convention under successive Governments not to comment in any detail on that surveillance.

[Lord West of Spithead (Lab)]

My Lords, I am delighted that we are now moving forward and doing something in civil nuclear power generation. It is super that the Chinese are risking their money on this EPR reactor. Both of the types for Hinkley Point are being built in Finland and France, and the costs for both are twice what they were; they are taking twice as long and are still not finished. However, the Minister will be aware of my security concerns. Historically, 70% of the supply chain for nuclear work has come from United Kingdom firms, but there is evidence to suggest that when the Chinese start building the third of the reactors—the Bradwell reactor—they plan to provide all the supply chain material, at a cost to UK manufacturers. Will the Minister ensure that we get that sort of percentage to our UK firms rather than letting the Chinese monopolise it?

[Lord Bourne of Aberystwyth]

My Lords, I thank the noble Lord for his welcome of the project. It is true that 60% minimum is guaranteed on the supply chain in relation to Hinkley Point C, as I am sure he will be aware. It is very early stages for Bradwell yet; it has not really been discussed. I am sure that the aim will be to get at least that, but as yet pen has not been put to paper at all.

[Lord Wigley (PC)]

My Lords, as only four EPR reactors are currently being built—one in Finland, one in France and two in China—and none have shown that they work safely or efficiently, why was that technology chosen for Hinkley, ahead of the proven advanced boiling water reactor developed by Hitachi, which is currently being used successfully at three different locations?

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord is right that the projects in France at Flamanville and in Finland to which he referred, and indeed in China—although the model is slightly different there—are ahead of what is happening at Hinkley Point C. This has been subject to detailed scrutiny, and we are satisfied that it is the best way forward. These are the first nuclear reactors that will have been built in this country for 25 years, and we are satisfied that this is the best way forward.

[Lord Teverson (LD)]

My Lords, given that Hinkley will almost certainly be followed by Bradwell in Essex in due course, what conversations have we had with the Chinese Government about the safe disposal of nuclear waste on nuclear sites? This is clearly important not just for world security but for our own security.

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord is right about the disposal of nuclear waste. It is an issue that we have to address. We have much nuclear power at the moment and it is being addressed. It is an integral part of the discussions with the Chinese and EDF. It has to be remembered that the project at Hinkley Point C is not a China lead: one-third of the project is Chinese and two-thirds is EDF. However, it is central to the project.

[Lord Stoddart of Swindon (Ind Lab)]

My Lords, is the noble Lord aware that when I worked for the Central Electricity Generating Board, a nationalised industry, we built our own nuclear reactors and the CEGB was a leader in the provision of advanced gas-cooled reactors, which are still working. Why on earth is it necessary for this rich country to employ French and Chinese nationalised industries to build our nuclear power stations?

[Lord Bourne of Aberystwyth]

My Lords, I was not aware of the noble Lord’s background in this field but I readily acknowledge it. It is true that in the past this has been the case. Sadly, over a period of time under successive Governments, the research and development in this area was run down. We are now making agreements which are subject to stringent security and safety precautions to ensure that we move forward with what most noble Lords will acknowledge is an important part of the energy mix—namely, nuclear. We already take 20% of our energy needs from nuclear. That will continue. We are satisfied, with the conditions that we have in place, that this is the best way forward for the country.

[Lord Hunt of Kings Heath (Lab)]

My Lords, surely the point raised by the noble Lord is exactly why the integrity of the future UK supply chain is so important. My noble friend Lord West raised the issue of Bradwell and future developments. Can the Minister assure me that the UK Government will have enough leverage to ensure that, in relation to Bradwell, the size of the UK supply chain contribution can be protected and enhanced? That is a security question as much as it is a question about the industry and jobs.

[Lord Bourne of Aberystwyth]

My Lords, I readily acknowledge and accept that it is important on both bases. In answering the question I sought to say that we have not yet begun any detailed negotiations on Bradwell. However, new procurement rules are in place which help us in Europe and with the supply chain. We have got a good deal in relation to Hinkley Point C. I have indicated that I hope that that will be a template for what we do in Bradwell. However, it is very early days and I do not want to mislead people into thinking that we are already in that degree of discussion—we are not.