EDITOR'S BLOG: The perils of getting into bed with the nuclear Chinese

When it comes to selling off our crown jewels, the UK is the most unsentimental nation on earth. But the nuclear deal might be a step too far, says Matthew Gwyther.

by Matthew Gwyther
Last Updated: 22 Oct 2013
George Osborne’s triumphant news yesterday that we are placing our future nuclear power industry in the hands of the Chinese made me think of yogurt. Specifically, French yogurt. Those with medium term memories will recall that a few years back the French government stepped in to make sure some initial overtures by Pepsi to acquire the French company Danone went no further. National security was cited as the reason.

We’re a whole lot less squeamish than the French (or the Americans) about selling off our crown jewels. When it comes to off-loading the family silver to foreigners, the Brits are the most unsentimental nation on earth. Thames Water is Australian. British Oxygen, Rolls Royce cars and Mini are German. Heathrow is Spanish. Jaguar Land Rover is Indian. This fire sale of our assets has been most complete in the world of football where a mere seven of the 20 clubs in the premier league are wholly owned by Brits.

In a ‘we love the free market’ way, many argue that this shows we’ve turned our back on blind, nationalistic socialism in our embrace of free, open, efficient ownership systems. But the truth is we’re pragmatists not ideologues. We’re to and from the global Wonga website because we’re humiliatingly skint. The only reason the property market is on fire in London is because a vast proportion of the high end stuff is being sold to Russians, Chinese and Malays. All the indigenous souls move to Croydon or Basingstoke and then are forced to blow 20% of their take home pay on a season ticket.  

But the Chinese nuclear gig is one step further into murky waters. There is no doubt something needs doing very fast about our energy-generation problems. The lights really will go out sooner or later unless some long-avoided decisions are made PDQ. See our feature from earlier this year.

We don’t have the cash or the know-how any more to make them ourselves. Awash with money and unhindered by environmental concerns, China is already building 26 conventional nuclear reactors by 2015, with a further 51 planned, and 120 in the pipeline. Let’s hope they haven’t used cheap, salty sand in mixing the concrete, as they do in some of their more cost-effective buildings.

The Chinese are no mugs when it comes to handing out their cash. Together with their French partners EDF, they are said to have been granted a guaranteed price of between £90 and £93 for each megawatt hour of electricity generated by the new plants. They were after an eye-watering £150. But the deal remains at a price is still 50% above the current wholesale cost of power.

Price is one thing. Whether we want to get so up close and personal with them in the nuclear reactor sack is another. ‘While any initial Chinese stake in a nuclear power project is likely to be a minority stake, over time stakes in subsequent new power stations could be majority stakes,’ the Treasury said. ‘Any investment from any country has to comply with rigorous regulatory standards for safety and security.’

You’ve only got to consider how the Chinese regime treats its own people to wonder  how it might deal with us in a couple of decades’ time when they have the Brits by the energy short and curlies.

Maybe I’m being far too suspicious. Far too backwardly French. Because, after all, I daresay if we put the contract to run our ageing Trident nuclear submarines out to tender the Chinese would almost certainly place a bid. They’d certainly run them more cheaply then we do. Why occupy an expensive berth in Faslane when a cheaper mooring in might be available Guandong ?

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