David Mowat
Main Page: David Mowat (Conservative - Warrington South)
George Kerevan
I am aware of that—that is the problem. Why is there a revolt on the board? It is not just the trade union members. It is true that a third of the EDF board is allocated to union members, union representatives and staff representatives. They are in favour of nuclear power, but they are worried about the impact on the company’s future. Why is there a vote? Why was the chief financial officer against this? EDF has a negative cash flow. Its debts are twice its company valuation. Its share price has halved in the past 12 months. How is it paying its dividend? It is doing so by issuing more shares and giving them to the shareholders. Imagine how insane that is.
David Mowat (Warrington South) (Con)
Every point the hon. Gentleman has made is right, but insofar as the company is underwritten by its main shareholder, the French Government, the issues he raises are peripheral.
George Kerevan
I think the hon. Gentleman has summed up the incredible state we have got ourselves into. Somehow, it will be all right on the night. Somehow, the French Government are going to bail out the United Kingdom’s energy policy. I can assure Conservative Members that that is not going to happen. What is going to happen is the following: at some point, I suspect with pressure from the British Government, what is left of EDF’s board and senior management will override the resistance of the minority on the board and green light construction. They will green light construction at a point where EDF cannot guarantee it has the funds to complete building the reactor. At some point, there will be a crisis and who is going to pick up the pieces? I can assure the House that it will be the United Kingdom taxpayer, not the French taxpayer.
George Kerevan
Of course, the strike price is subject to certain qualifications. Were EDF to build the reactors and make a vast profit—the strike price is more than twice the current cost of electricity and there is an increment for inflation—there would be a clawback. If it makes a profit beyond what was originally envisaged, some of the money would come back to the British taxpayer. The clawback was insisted upon and enlarged by the European Commission, so it was interesting listening to the Minister this morning on the radio, given her position on the UK leaving the EU. It was in fact the Commission that tried to stand up for the British consumer. That is one reason I will be voting to stay in the EU.
I have made the basic point, so I shall draw to a close.
David Mowat
The hon. Gentleman is making the case that the EDF board, which, with others, produces 70% of France’s electricity from nuclear power, is incompetent. Is it his position that the board of Hitachi is equally incompetent, given that it is also planning to build nuclear power stations in Britain, or has it not got as far as the SNP in its analysis of the practicality of the whole thing?
George Kerevan
I cavil at the word “incompetent”. The board’s decision has become politically charged. That is the point. The UK Government are desperate to continue with the project because everything is hitched to it and because it keeps the cost of building Hinkley C theoretically off the books—although it cannot remain so in the long run—and the French Government are committed to it because EDF is in a major financial crisis and they want to protect its reputation and give it a chance to grow out of its problems. If we make such decisions political, however, we make bad decisions—that is my point. It is strange that I have to lecture the Conservative Government on that.
Some of the senior management of EDF, knowing the difficulties, want to delay and want to get the funding in place. It was because the chief officer wanted the funding in place that they got rid of him. How can that be so? Aside from politics and differences on nuclear power, cannot the Government and the Department of Energy and Climate Change see the problems that they are getting themselves into? All they come back with is “It will be all right on the night”.