So Britain’s first major nuclear power station construction in a generation – at Hinckley – is to come courtesy of the French state owned EDF energy company and Chinese state owned interests. In return for providing up to 7% of Britain’s energy needs, the French and Chinese will be guaranteed fixed rate electricity price deals, which are double current prices. This jaw-dropping deal has been trumpeted by David Cameron and George Osborne with the sort of platitudes that a Sixth form student can see through. For, if it all goes belly-up, and if Messrs Cameron and Osborne have got their sums wrong, British consumers will end up helping to subsidise French taxpayers and the Chinese state by paying through the nose for energy for years to come.
Even The Times was moved last week to wonder why Britain, ie the British state, couldn’t build its own new nuclear power stations? Yet imagine if ‘Red’ Ed Miliband had Britain build it’s own power stations?
Here is market failure writ large. For years, we have watched as valuable state assets have been flogged off to foreign interests at rock-bottom price, culminating in the botched sell off of Royal Mail. But it has been the hawking off of state energy assets and the complete failure of Government to develop a coherent energy policy that now sees the possibility of lights going off next winter (this was something that didn’t even happen in the midst of the 1984/85 miners strike – because to the chagrin of NUM supporters such as me, one of Britain’s most successful public sector enterprises, the Central Electricity Generating Board, managed to keep the lights on throughout that year).
So here, briefly, is what has happened since Britain shut down its coal industry, refused to invest in carbon capture and clean coal technology and became a net importer of the black stuff. The dash for gas, that supposed cheap answer to coal, was so fast and furious, that it has run out. Now we are dependent on Russia and Algeria for the stuff, just as predicted by one Arthur Scargill. North Sea Oil is also running out, and all the while perfectly good power stations, such as Didcot, are being closed prematurely because carbon capture technology is not in place.
The breaking up and selling off of the CEGB initially led to fourteen major UK based, if not owned, power suppliers. There are now six, who as Ed Miliband has rather effectively shown, form an effective cartel. The nuclear part of the former state power equation has always been a difficult one, because the big power companies don’t want to invest in it without massive tax payer subsidies.
It is not only a mess, but consumers are being held to ransom. To add insult to injury, we are steadily losing any energy security and now, with Hinckley, what could have been a joint British and French concern is to be a French/Chinese concern. It is all enough to make grown men and women weep.
During last week’s BBC Any Questions, a questioner volunteered that as the nights draw in, she would prefer to wear a red jumper as opposed to a blue one, because it would be ‘warmer’. This is, I suspect, how many people feel about Ed Miliband’s plans to cap energy prices – quite the most popular policy to have emerged from the autumn conference season. But the questioner, went further, and following the same logic asked; ‘why don’t we nationalise the power companies?’ The ‘n’ word clearly has the same effect on media types as it does the political class, because Jonathan Dimbleby immediately said; ‘Well, we can’t go there unfortunately’.
Well, if The Times can go there, and the French and the Chinese can build here, why ever not? Doesn’t it make absolute sense for Government not only to protect the consumer, but to make strategic industrial decisions on the grounds of energy security and diversity of supply as well as British jobs and British industry? This is not simply a matter of more effective regulation of a market that is out of control and which cannot and will not deliver.
In Ed Miliband, we have a leader, whose energy brief in the last Labour government gives him a head start over most in the field. In Shadow Energy Secretary Caroline Flint, we have a pugnacious and effective battler for the consumer. But what we now need is for this energy and commitment to also be used to finally jettison the nonsense that used to be peddled by Tony Blair and Peter Mandelson that ‘ownership doesn’t matter – it is what works’. It does, very much who has ownership, not least because it clearly isn’t working for consumer and taxpayers alike. It also matters because other countries state owned interest and sovereign investment funds are hoovering up what are left of our assets.
If the lights do go out next year, David Cameron, the market and the private energy companies will be completely to blame.