Hinkley Point delay due to May's 'suspicion' over Chinese involvement
The government’s decision to delay final approval of the Hinkley Point nuclear power plant is due to Theresa May’s suspicion over Chinese involvement in the project, according to the former business secretary of the Coalition government.
May caused shock in the business world when she ordered a last-minute halt on Friday to agreements finalising the £18bn project so that the details could be scrutinised further.
Speaking to the Sunday Telegraph, Liberal Democrat Vince Cable suggested May had a "general prejudice" against Chinese investment due to national security concerns. Under the provisional agreement, China’s state-owned General Nuclear Power Corporation (CGN) will own 33.5 per cent of shares in the project
"It came up in all kinds of different ways. Osborne kept pushing for more liberal treatment of visas for Chinese businessmen and she was very reluctant to go along with that. So, I think she has form in adopting a more suspicious approach, more in line with the American position.
"My recollection was that when approval was sought for Hinkley, she raised objections on the grounds of national security issues with China. She has expressed, in several different contexts, severe reservations about China getting too close to the UK."
The ex-energy secretary Ed Davey has also said former chancellor George Osborne blocked moves intended to provide extra protection for the Hinkley Point project from potential national security threats posed by China.
"Concerns on Chinese involvement didn't stand up to scrutiny last time round, but if the Treasury had adopted my proposal for a special share we could have included extra safeguards. But Osborne rejected it without explanation," Davey said.
The proposed ‘special share’ in the consortium would have enabled the government to intervene on certain decisions to protect the national interest.
May was supposedly unhappy with the Coalition’s ‘gung-ho’ approach to doing deals with Beijing in general, but it is thought the delay to the project may also stem from a fear of a backlash over prices due to the unusually large amount of money French energy giant EDF will be paid for generating power from Hinkley - £92.50 per megawatt hour of electricity generated.
Labour leader Jeremy Corbyn described the price levels involved as "disturbing" as he backed a review. The boss of EDF, Vincent de Rivaz, has tried to calm the fears of workers by insisting he understands why May wanted more time to consider the project, while insisting the deal was still ‘strong’.
China has hit back over reports of May’s suspicion. Its official Xinhua news agency has said the country will not tolerate "unwanted accusations" about its investments in Britain, a country that cannot risk driving away other Chinese investors as it looks for post-Brexit trade deals.
On Saturday, CGN said it respected the decision of the new British government to take the time needed to familiarise itself with the programme.
"However, what China cannot understand is the 'suspicious approach' that comes from nowhere to Chinese investment in making the postponement," said an English-language commentary broadcast on Xinhua.
The project will create thousands of jobs and create much-needed energy following the closure of coal-fired power plants, Xinhua added, dismissing fears China would put "back-doors" into the project.
"For a kingdom striving to pull itself out of the Brexit aftermath, openness is the key way out," it said.
"China can wait for a rational British government to make responsible decisions, but cannot tolerate any unwanted accusation against its sincere and benign willingness for win-win cooperation."
Britain and EDF first reached a broad commercial agreement on the project in 2013, with China’s involvement surfacing two years later.
Foreign ministry spokeswoman Hua Chunying said China "hopes that Britain can reach a decision as soon as possible, to ensure the project's smooth implementation”.