Nuclear Power

Alan Brown Excerpts

Monday 4th June 2018 Commons Chamber

[Greg Clark]

My right hon. Friend takes a great interest in this issue. When I made my statement on Hinkley he advised that we should consider using the Government’s balance sheet in that way, and we will consider that as part of the discussions. As for the contracts that are entered into, one of the requirements of the state aid regime is that any contracts have to be on a non-discriminatory basis, which will guide the letting of any such contract.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

I thank the Secretary of State for early sight of his statement but, to be truthful, it did not tell us any more than we have been able to glean from the media today. I find the Government’s nuclear obsession mind-boggling. When Hinkley was first proposed all those years ago it was on the basis that it had to be commissioned by December 2017 or there would be a risk of the lights going out. All these years later, it will not be generating at full capacity until something like 2030, which seems to undermine the need for new nuclear.

Hinkley is shocking value for money, with a 35-year megawatt-hour strike price of £92.50, whereas recent offshore auctions have returned bids of £57.50 per megawatt-hour over a 15-year period. That is the real cost benchmark that the Government should use. Considering that the National Audit Office concluded that it would be impossible to know for decades whether building Hinkley represented good value for money for UK taxpayers, it is utterly incredible that we are diving headlong into another costly venture. The Secretary of State has said that he wants to do a sector deal, but we do not know what value for money that will provide. It has been reported that the strike price for the new power station will be something like £15 per megawatt-hour cheaper than at Hinkley, but how much of that cost reduction is due to the billions of pounds of direct investment from the taxpayer?

Given the company’s questionable track record on safety, will the Government confirm that Hitachi will be financially liable in the event of any accidents? Given the unprecedented level of taxpayer investment, how will the Government demonstrate that they have met the Public Accounts Committee’s demand for a full value for money assessment before they finally sign off the deal, and how will Parliament be able to scrutinise that? When will we know the level of the financial commitments?

If the Secretary of State is so willing to commit taxpayers’ money directly for stakes in projects, will he consider paying for national grid upgrades to further facilitate the deployment of renewables, instead of tagging such upgrades on to the costs of renewable projects? As bad as the Government’s obsession with nuclear is, this is also about their attacks on renewable investment. When will they have a coherent energy policy and proper investment in future technologies rather than a technology that has had its day?

[Greg Clark]

I thank the hon. Gentleman for his comments. On statements to the House, I think all Members would recognise that I have come to the House at the earliest possible opportunity. It was today that the decision was taken to enter into negotiations. Members will know that I always keep the House updated and always will.

It is a bit rich of the hon. Gentleman to complain that new nuclear power will come online later in the 2020s, given that he and his colleagues have resisted the replacement of our nuclear fleet, which we have known needs to be replaced for all this time. It is an act of responsibility on the part of this Government that we are planning ahead for the replacement of the 20% of our electricity that is currently generated from nuclear power. It is important for consumers in Scotland and in the rest of the United Kingdom that we do that.

The hon. Gentleman criticised what he regarded as the value for money of the Hinkley project. He will have heard me say at the time that that represents the highest price we will pay for new nuclear. I expect future new nuclear power stations to come in at a lower price. I have made it explicit today that that is a requirement of the negotiation. However, this is the beginning of a formal period of negotiation.

The recommendations of the Public Accounts Committee and the National Audit Office have shaped the approach we are taking. The value for money test has to be met, and at all the key milestones I will ensure that Parliament has the opportunity to scrutinise the progress of the negotiations.