Nuclear Update

Ed Davey Excerpts

Thursday 17th January 2019 Commons Chamber

[Greg Clark]

That is demonstrated in my statement today. We were talking about a strike price substantially less than that of Hinkley, and I said when I made my statement to the House on Hinkley that we would do that. I say gently to my hon. Friend, who is a lifelong environmentalist, that exactly the same arguments were advanced against the initial contracts for offshore wind—namely, that they would be burdensome and that we should not enter into them. We have now seen substantial capacity becoming available at prices that will shortly be free of subsidy entirely. That is an excellent development for consumers, for the reasons that he has given, but it is also the case that the manufacturers in the supply chain are located right across the UK, which is a further industrial benefit of the strategic policy.

[Sir Edward Davey (Kingston and Surbiton) (LD)]

I agree with the Secretary of State that Britain has had huge success in renewables, especially with cheaper offshore wind, thanks to the Liberal Democrat policy that he has kept in place. However, I also want to express astonishment at the generosity of the offer to Hitachi. With the equity stake and the debt finance, it appears to be even greater than that offered to Hinkley Point C, yet Hitachi—like Toshiba at Moorside—is still unwilling to build new nuclear in Britain. What does the Secretary of State blame most for this setback to his nuclear strategy? Is it the fact that renewables are becoming much cheaper than nuclear, is it Japan’s fears about Brexit, or is it something else?

[Greg Clark]

I am disappointed in the right hon. Gentleman who, as a former Secretary of State, I would have thought knows the changing economics of the energy market, which I set out pretty clearly. I gently remind him that, as Secretary of State, he was responsible in his time for the negotiation of the terms of the Hinkley Point C agreement, so it is surprising to hear him being so critical of it.

The right hon. Gentleman wants to take credit for one of the policies for which he was responsible but not the other, which I might uncharitably say is characteristic of his party. As with Hinkley Point, there was a recognition that financing such significant projects—£16 billion from a private company—is hard to do through the conventional channels of private investment. It is desirable to have nuclear as part of a diverse energy mix. If I might put it this way, having a substantial mix of technologies has an insurance quality. We should recognise that, but there is a limit to what we can pay for the benefit, which is reflected in my statement.