May must drop Hinkley
CLAIRVOYANT, lucky, or just plain smart? Maybe Theresa May is all three. Whichever she is, the Prime Minister now has the ammunition she needs to block China’s involvement in the Hinkley Point nuclear power station. And she can do so immediately without losing face.
For Britain’s potential partner in Hinkley Point, the state-owned China General Nuclear Power giant, is being accused in the US of leading a conspiracy to steal American power secrets to speed up the development of Chinese reactor technology.
A senior adviser of China’s nuclear giant is due to appear in a US court next week to face charges of recruiting US experts to obtain sensitive nuclear technology following a probe by the FBI and the National Security Division.
The US case follows deep-rooted fears about Chinese cyber-related espionage. Only a few months ago, Susan Rice, the US National Security Adviser, warned that Chinese espionage ‘isn’t a mild irritation, it’s an economic and national security concern to the US’.
Australia is worried too, and moved swiftly yesterday to stop more Chinese investment. The Aussies have put a block on Chinese and Hong Kong bidders from taking a controlling stake in Ausgrid, the country’s biggest electricity network, citing national security fears.
Security experts in the UK – inside and outside of government – have also been warning about China’s predilection towards industrial espionage and questionable business practices. But the previous Government was so busy bending over backwards, courting the Chinese in the so-called ‘golden era’ of inward investment, that they turned a blind eye to the warnings. Or ignored them.
May’s chief of staff, Nick Timothy, did listen and so did his boss, which is why she has delayed approval. Timothy went further than listen, criticising ministers publicly last year after the Hinkley deal was signed for ignoring MI5 and other expert advisors who warned the Chinese might build weaknesses into the computer systems, allowing them to shut down the UK’s energy at will.
As part of the Hinkley deal, China’s CGN was also to be allowed to back a new Sizewell plant in Suffolk and potentially build its own plant at Bradwell; that’s a lot of Chinese-controlled power. National security aside, there are other problems with the £18bn Hinkley project. The strike price for electricity is high at a time when energy costs are falling and the technology of the new Pressurised Reactors being built by France’s EDF is unproven – and EDF has little spare capacity because it is finishing plants in Normandy and Finland.
May should scrap the project and look seriously at the alternatives. There are many, and they are cheaper. Let’s pipe in more gas, speed up fracking, put big money behind solar technology, which, once the storage issue is solved, will be efficient and cheap, invest in new battery technology and tidal power, more research into thorium nuclear fuel and push ahead with SMRs, the small modular nuclear reactors being built by the British.
Such sources of energy are growing faster than you think; on some days the entire electricity supply of Portugal is run on solar and wind. Once the PM is back from holiday, she should call her new industrial strategy committee together, drop Hinkley and get cracking on alternatives; time is running out.
Alibaba turns the ARM
THERE is another twist to the ARM story which might be appropriate for the UK authorities to look at as they mull over the £24.3bn bid from Japan’s SoftBank. As part of winning approval, SoftBank’s boss, Masayoshi Son, will give certain assurances to the Takeover Panel about keeping ARM’s HQ in the UK.
In an interview here yesterday, Son said he was unlike other foreign buyers. He wants to invest and create more jobs, and says he will sign a legal contract in the UK courts. Son sounds sincere and there is no reason to doubt his intentions. But what about SoftBank’s own financial position?
Looks a little perilous to me. Worth £54bn on the Japanese stock market, it has debt of £85bn. Son also owns a £38bn stake in China’s Alibaba, the e-commerce giant. What happens if SoftBank gets into trouble, Alibaba goes to the rescue and ends up owning ARM? Now that would be a technology transfer we might regret. Should clauses about a future sale be built into Son’s agreement?
Mountain power
WHAT is it about power ladies and mountains? Theresa May is on a walking holiday in the Swiss Alps. Germany’s Angela Merkel is a mountaineer too: this year she’s hiking in the Italian Solda mountains. Lady Thatcher was another regular Alpine guest.
Then there is the Queen, outdoors whenever she can. After Helen Mirren wore a Barbour jacket in the film The Queen, sales shot up. Barbour – which incidentally is run by two Barbour women, Margaret and Helen – should bring out a new one; the Difficult Woman Jacket would do just fine.