She’s snubbed France, upset China and trashed Cameron’s legacy. Our Political Editor explains... WHY MAY WENT NUCLEAR
Unions and bosses warn £24bn nuclear plant is vital for British economy
IF FRANCOIS Hollande thought Theresa May was going to be a soft touch she removed any such illusion in two terse sentences when they met in Paris ten days ago. ‘I have just become Prime Minister,’ she told him. ‘It is my method.’
The words were delivered slowly and deliberately in the well-modulated English vowels of a Home Counties vicar’s daughter. But the impact was nuclear, literally.
It was her way of telling shocked Hollande she was delaying the £24 billion Hinkley Point power plant deal hammered out by David Cameron and George Osborne with the French and Chinese governments. Nor was it the only humiliation she meted out to diminutive Hollande.
Diplomats claim tall visiting leaders are sometimes encouraged to stand on a step below Hollande so he is not ‘overlooked’ on his own doorstep.
Mrs May stood on the same step, towering over France’s head of state by a full head – her own. She often spurns her trademark kitten heels for more practical ‘flats’.
Not that day. Hollande, known in France as ‘Monsieur Flanby’, which loosely translates as Mr Custard, is not the only politician who could be forgiven for feeling as though he has been stilettoed by Mrs May.
HER dramatic intervention in the Hinkley Point deal is the latest and clearest evidence that she is prepared to rip up key parts of what Cameron and Osborne hoped would be their legacy. They put the deal together painstakingly over years, with huge efforts to woo the Chinese, sweeping aside human rights and security concerns to plead for investment in key infrastructure projects, including the HS2 high-speed rail line.
In one fell swoop, Mrs May has snubbed France, risked upsetting the Chinese and effectively trashed Cameron and Osborne.
So why did she go nuclear on this issue? When she became Prime Minister, critics said she was too cautious, too shy and lacked the ruthlessness needed to be a world leader.
In Beijing and Paris, they now know differently.
She wanted to go through the deal with a fine tooth comb in her own good time. And neither the Chinese nor the French, nor the prospect of an almighty fracas, were going to stop her.
Mrs May’s decision to delay Hinkley Point was made strictly on commercial and security grounds. She would have given equally little regard to sparing Cameron and Osborne’s feelings.
However, some are bound to see in her decision an element of a dish of revenge served chillingly cold.
Her personal relationship with Cameron never had real warmth. When former Deputy Prime Minister Nick Clegg observed to Cameron that May was ‘a bit of an Ice Maiden with no small talk whatsoever – none’, Cameron replied: ‘She’s exactly like that with me too!’
May underlined her disdain at Cameron’s more casual approach to politics when she reorganised the PM’s study the day after moving in.
Cameron had aped his New Labour hero Tony Blair’s casual ‘sofa’ government style whereby advisers in open-necked shirts would make policy relaxing on the PM’s sofa, sometimes with no formal agenda.
Traditionalist Mrs May moved the sofa to the edge of her No 10 study, with a more formal table and chairs moved to the centre instead.
An extra table added to the Cabinet by Cameron so a dozen or more Ministers with ‘semiCabinet’ status could attend, partly to meet objections that there were too few women, has been removed by Mrs May.
Perhaps the biggest clue to her Hinkley Point decision comes from an article written last October by her formidable Joint Chief of Staff, Nick Timothy, sometimes referred to as ‘Theresa’s brain’.
While Cameron and Osborne were falling over themselves to woo China’s President Xi Jinping over Hinkley Point on a state visit, Timothy accused them of ‘selling our national security to China’.
He wrote on influential Tory supporting website ConservativeHome: ‘Rational concerns about national security are being swept to one side because of the desperate desire for Chinese trade and investment.’
Significantly, Timothy accompanied May on her trip to Paris and sat at her side during private talks with Hollande.
Timothy has his own reason to resent Cameron after being accused of plotting to help May oust him from power. Two years ago, Timothy was accused of spreading claims that May did not trust ‘incompetent’ Cameron. It led to him being banned by Tory chiefs from standing as a Parliamentary candidate – blamed on Cameron’s Conservative HQ supporters.
Timothy’s fellow Joint Chief of Staff, Fiona Hill, is uniquely placed to give her own view on the security implications of Communist China’s role in Hinkley Point. She has been in a close relationship with ex-spook Charles Farr who was Mrs May’s counter-terrorism adviser at the Home Office and now chairs Downing Street’s Joint Intelligence Committee.
Hill also bears the scars of May’s running battles with Cameron and Osborne. She lost her Home Office job after fiercely backing Mrs May in a spectacular row with Michael Gove. Mrs May brought Hill, also credited with May’s stylish wardrobe, back in from the cold the moment Cameron was out of the No 10 door for the last time.
May’s relations with Osborne were even more fractious. His allies were machinating against her as they jostled to succeed Cameron, while the pair clashed often in Cabinet on immigration. Osborne brushed aside criticism for doing deals with China despite its poor record on human rights. When he asked May to make it easier to get UK visas for Chinese visitors, she blocked him.
THE delayed decision on Hinkley Point should be viewed alongside the way that Mrs May softened Cameron’s socalled ‘austerity’ policies, indicated a tougher line on corporate misdeeds and vowed to do more for the poor and less for the rich.
The content is strikingly different from that of Margaret Thatcher. But Oliver Letwin, who worked for both Thatcher and Cameron, is the most senior Conservative to see similarities in the two women Prime Ministers’ styles. Asked about current women political leaders, Mr Letwin said: ‘Margaret Thatcher rescued this country and was a very remarkable person. Theresa May is an outstandingly good leader and politician and may well rival any British Prime Minister.’
Her resolve in blocking the Hinkley Point deal was reinforced when she found out that, fearing she might veto it, the bosses of EDF, the state-owned French company building the plant, planned to bounce her into rubber-stamping the deal.
Mrs Thatcher was famous for saying ‘No, No, No’ to the EU. Mrs May’s response was the same. It’s her ‘method’ too.
Some see it as revenge ...served chillingly cold
BUSINESS leaders and trade unions were united this weekend in calling for the Government to press ahead with building the Hinkley Point nuclear plant as quickly as possible.
Within hours of the Government announcing it would delay signing up for the new nuclear plant both the CBI and the TUC called for it be approved.
CBI deputy director general Josh Hardie said it was needed to show that ‘the UK is well and truly open for business.’
TUC general secretary Frances O’Grady said the multi-billion pound project was needed to deliver thousands of jobs and needed ‘the green light as soon as possible.’
The board of French group EDF Energy voted to go ahead with the plan last week, only to be stunned by the UK Government announcing it needed to review the deal for two nuclear reactors at a cost of £24.5billion.
EDF boss Vincent de Rivaz once boasted that the British would be cooking their Christmas turkeys using power from Hinkley Point by 2017. But many believe it is the project itself that is the turkey.
‘I doubt there is anyone outside EDF who would support this project the way it is structured,’ said an executive at another energy firm.
Much criticised is the guaranteed minimum price of £92.50 per megawatt hour, which the Government agreed consumers must pay EDF for the electricity generated by the new reactors at the Somerset site.
That is far higher than the wholesale price of electricity, which this weekend was £37 per megawatt hour. As long as the wholesale cost of energy is lower than this so-called ‘strike price’ consumers will make up the difference with higher bills.
Another energy source said: ‘Look at the burden on our own customers that Hinkley Point results in. We are going to get the blame for that.
‘Inside the industry we’ve stopped referring to it as Hinkley Point. We all call it What’s The Point?
‘We’re thinking of getting together and sending Vincent a turkey – just to make sure he gets the message.’
The latest delay from the Government follows a decision-making process that has been at best tortuous, at worst chaotic, given that approval for new nuclear plants was granted a decade ago. But some are happy to see Ministers step back. Richard Black, head of the Energy and Climate Intelligence Unit thinktank, said: ‘Ten years ago Hinkley Point looked like an advantageous deal. Now that is arguable. I think the latest delay is quite pragmatic.’
While British bosses and trade unions appear united behind Hinkley, the same cannot be said of their equivalents inside EDF.
French unions fear that because EDF will not receive any money until the reactors start producing power (not expected before 2025 at the earliest) the financial burden weakens the company in the meantime and puts French jobs at risk.
French trade unionists on the EDF board voted against the deal last week, while its finance director quit ahead of the vote fearing the deal would be devastating for EDF. The delay is significant for a UK Government under pressure to show the UK is open to foreign investors after the Brexit referendum result.
China General Nuclear is a partner to EDF in the plan and paying up to a third of the cost, though the exact terms of the deal have never been made public. Britain has said it will underwrite the deal by offering loan guarantees of at least £2 billion.
Prime Minister Theresa May is not uncritical of China. Her favoured adviser, Downing Street’s joint chief of staff Nick Timothy, has been scathing of China’s involvement in Britain’s nuclear programme. He wrote on the ConservativeHome website that Hinkley would allow the Chinese to ‘use their role to build weaknesses into computer systems which will allow them to shut down Britain’s energy production at will’.
However, Black points to two other possible reasons for the delay. First, the new Government wants to work out how Hinkley Point fits into its plan to meet obligations to cut its greenhouse gas emissions to 61 per cent below 1990 levels by 2030 in a ‘carbon budget’ that must be signed into law by the end of the year.
Second, if the Government delays the decision until next year, then a nuclear plant using the same design of reactor should come on stream in China, allowing the Government to see if it works. The only two other such reactor designs are at Olkiluoto in Finland and Flamanville in France. Both are many years behind schedule and billions over budget.
A delay until after the French elections in the spring would also allow EDF to reduce the price and commit to building something cheaper and less controversial, experts reckon.
Hinkley Point C is intended to supply 7 per cent of the UK’s electricity. Without it there would be a big hole to fill. Hinkley Point A is being torn down and Hinkley Point B is due for decommissioning in 2023.
The solution favoured by energy industry insiders is gas. Gas-fired power stations take as little as two years to build and produce half the carbon dioxide emissions of coal.
Alternative energy sources such as wind and solar are becoming more attractive, though, like nuclear, they have been heavily subsidised, with their output enjoying its own minimum ‘strike prices’ for years.
The Government’s announcement it wants to review Hinkley has cast a even sharper spotlight on the decision. And like the other major infrastructure issues it faces – airport expansion and HS2 – it is clear that whatever decision it makes, it can be sure it will not be universally popular.