Nuclear Power

Rebecca Long Bailey Excerpts

Monday 4th June 2018 Commons Chamber

[Rebecca Long Bailey (Salford and Eccles) (Lab)]

There is cross-party consensus that new nuclear will continue to play a vital role in the UK’s energy mix, and I am therefore pleased to hear that progress has been made, after some uncertainty, on the Wylfa nuclear plant. Given the well-documented failings of the Hinkley Point C deal, however, I am deeply concerned by the way in which the financing has been or will be negotiated—namely, the lack of transparency and parliamentary scrutiny thus far.

On 15 May, I wrote to the Secretary of State requesting information about the negotiations and I am yet to receive a response. Until the last few days, we have had to piece together snippets of information from the Japanese press, and titbits from energy and environmental groups. We have finally heard today that a deal will be negotiated with Hitachi, which media reports suggest will include a guaranteed strike price, loan guarantees and an equity stake in the project in exchange for direct Government investment.

I must say that this is a surprising shift from the Government’s ideological position against Government investment in new energy infrastructure, and I wonder whether the shift applies to other renewable technologies, for which support has been repeatedly cut by this Government. I suspect not. I must sound a note of caution. Without sufficient detail and transparency, the House is unable to determine the risks and benefits borne by consumers and taxpayers in the proposed deal.

Last year, the National Audit Office concluded on the Hinkley Point C deal that the Department had

“not sufficiently considered the costs and risks of its deal for consumers.”

The NAO made a series of recommendations, including mechanisms for reviewing value for money and the affordability of the deal; making it clear who is accountable for oversight and governance; ensuring that the cost and timing implications of alternatives are shown clearly; and developing a plan to realise the benefit across local economies and supply chains. Last year, I asked the Government to adopt those recommendations. So will the Secretary of State say whether he has done so and, if not, why not? However, if the Government have done so, will he publish all relevant documentation showing that each recommendation has been followed in relation to Wylfa or, indeed, confirm that they will be followed if they have not been processed yet?

Negotiations between the Government and Hitachi thus far appear to have been conducted behind closed doors. Will the Secretary of State say whether the House will be given time to scrutinise the proposed deal outline, or is this simply a done deal? If so, have any binding commitments been made or, for example, have any preliminary heads of terms or memorandums of understanding been issued? The NAO stated that

“making commitments to investors can limit flexibilities to react to a change in circumstances.”

The implications of that need to be understood and communicated clearly to decision makers. It is important to ensure that the cost and timing implications of alternative funding arrangements are shown clearly—again, that is advocated by the NAO. If such alternatives have been, or will be, examined, can the Secretary of State provide the House with details today?

I move on to safety issues. It has been widely reported in the press that Hitachi is seeking to “reduce or eliminate” its financial responsibility for accidents. Will the Secretary of State say whether that is true? If so, where will such liability lie and what safety impact assessments have or will be carried out from construction and operation through to decommissioning? Indeed, on the issue of decommissioning, will he explain who will bear that liability and how much the cost is likely to be?

Despite the good news for Wylfa, subject to the queries that I have outlined, it appears that further down the Welsh coast the news is not so good for renewables generation. Media speculation suggests an impending negative decision on the much-anticipated Swansea tidal lagoon project after years of planning and campaigning by Tidal Lagoon Power, the Welsh Government, environmental groups and MPs across the House. If that is true, it is outrageous. To assume that Swansea is somewhat redundant, given the plan for investment in Wylfa, is very short-sighted.

I understand that Tidal Lagoon Power has offered to negotiate further, but has not received a response from the Government. Under the plans, there would be a zero-carbon power plant producing energy for over 100,000 homes, creating thousands of jobs across Britain; turbines built in a wall in the sea that harness the power of the tides, so that we can turn the kettle on in the morning; world-leading infrastructure built in Britain using British steel to last more than a century; and the potential to export our expertise and products across the globe. An ambitious, decisive and forward-thinking Government would jump at a project like that, just as they have done with Wylfa. Well, perhaps not. Recently, someone joked to me that the desk of the Secretary of State was where good ideas went to die. I hope that that is not the case with the Swansea tidal lagoon, and I implore the Secretary of State one last time to stop messing about, and to sit down with the company and the Welsh Government to develop a deal urgently.

[Greg Clark]

I am disappointed that the hon. Lady did not continue in the spirit in which she opened her contribution. This is an important moment, and we are beginning a negotiation on a project that will supply energy to this country for the next 60 years, until towards the end of the century, which will create jobs and reduce our carbon emissions. She said that her party supported the proposal and that there was cross-party consensus—one could be forgiven for missing that in her tone—and it is important to establish that, because it is evident that any 60-year project will take place over the life of successive Governments. This country has given nuclear investors confidence over time that there is a strong commitment to such major infrastructure projects, so I hope that she will back the commitments that she and her party made in their manifesto last year to support new nuclear and recognise the considerable opportunities, as she put it, for nuclear power internationally and domestically.

The hon. Lady asked about the financing model. She urged me in a letter to reflect on the recommendations of the National Audit Office and the Public Accounts Committee to explore alternative financing models that can reduce the price of the electricity that is generated. That is exactly what I have set out—I have followed the recommendations of the NAO and the PAC. We are entering a negotiation—I think somewhere in her remarks there was a welcome for that—but the essence of doing so is that a deal has not been agreed. We need to explore that, and it is subject to the very tests that she set out and that the NAO and the PAC observed are required, including on value for money.

On safety, the hon. Lady should be reassured—there are many hon. Members who are familiar with the nuclear industry in this country—that the safety standards operated through our independent nuclear inspectorate are the highest in the world, and that the generic design assessment is the most exacting in the world. We always abide by the rulings and requirements of the independent regulators so that we can have full confidence in the safety of this important industry.

Finally, the hon. Lady mentioned other potential investments, including the proposal for renewable power in Swansea. She knows—we have had exchanges about it across the Dispatch Boxes—that I believe in a diversity of energy supply, but we need to make sure that value for money is offered for taxpayers and bill payers. A rigorous assessment is required and, as I have done today, I will update the House when the process is concluded.