Osborne and the buttering up of Beijing
THE decision to halt Hinkley Point last night cast the spotlight back on the hugely controversial subsidy deal thrashed out by George Osborne in his desperation to secure Chinese backing for the nuclear plant.
Under the subsidy regime agreed by Mr Osborne, householders and businesses will need to pay £92.50 per megawatt hour for Hinkley electricity from 2025 – compared to a current wholesale price of £40.
And, during a visit to China last September, he also agreed to a £2billion Government guarantee for the plant, to help secure the support of the State-backed China General Nuclear Corporation and China National Nuclear Corporation.
The guarantee meant that if developers went bust the taxpayer would guarantee around £2billion worth of loans taken out by the project. The Government added that further amounts were ‘potentially available in the longer term’.
Even if the project is delayed, Britain still has to pay the premium price. So if the project is held up by four years until 2029, the UK still has to pay the price for energy as agreed for 2025.
As accusations emerged from Downing Street that Mr Osborne had been desperate to butter up the Chinese, Commons energy and climate change committee chairman Angus MacNeil said Mrs May might have put the brakes on the ‘very bad’ deal, as it may cost less in the long run to pull out now.
Alex Wild, research director at the TaxPayers’ Alliance said: ‘It’s encouraging the Government is rethinking this terrible deal that would see consumers paying exorbitant bills for decades.
‘The technology is completely unproven and the costs and time needed to build the reactors has already doubled since the initial proposal. The new department needs to completely rethink the energy policies and arbitrary targets which are driving up bills and destroying jobs.
‘Even if the Government decides more nuclear capacity is needed, there are far more affordable options available.’ Government insiders made it clear Mrs May wishes to convince herself Mr
‘Exorbitant bills for decades’
Osborne had not got a bad deal for the UK taxpayers in his desperation to get China on side.
During his time in the Treasury, Mr Osborne was accused of kowtowing to China to secure trade deals. Last September, he ignored the country’s human rights abuses as he tried to secure investment into the UK, including nuclear power plants.
He downplayed the country’s lack of democracy as a ‘different political system’. And he argued Britain could still be the oneparty dictatorship’s ‘best part- ner in the West’ despite its record of torture and restricting freedom of the press.
An edition of the Chinese Communist Party’s official newspaper welcomed his decision not to question China.
The Global Times newspaper wrote in an editorial: ‘Keeping a modest manner is the correct attitude for a foreign minister visiting China to seek business opportunities’.
During the visit, Mr Osborne announced his desire to ‘ formally connect’ the London and Shanghai stock exchanges.
He also fought a series of running battles with Theresa May over visas for Chinese visitors. Mr Osborne insisted Chinese businessmen in particular should be able to travel to the UK freely.