Westminster Diary

This week the Nuclear Energy (Financing) Bill returned for its second reading and passed 255 to 80.  There were few MPs in the Commons for the debate and over 250 votes were not recorded.

CND – Nuclear Power in the UK

Consumers shoulder the cost and risk. Private sector have guaranteed profits.

The current financing system has stopped projects from going ahead. Private investors do not want to invest in building new nuclear power plants because it is so costly and high-risk, they have to invest up front and don’t get profits until the project is completed. This bill will allow companies to pass the costs of research, development and construction onto the consumers – the British public – who will shoulder costs through paying an additional fee ON TOP OF the cost of their domestic energy consumption. This means ordinary people, will be paying three times for nuclear power energy. First through their taxes – the government are ‘investing’ £1.2bn – second through an additional cost to their bills, and third for the cost of their domestic energy use. Whilst shareholders will receive profits even before the reactors are constructed, consumers will see none of these profits, instead exposed risk of spiralling cost, potential over-runs and accidents.

Government position on nuclear power and its financing.

The government incorrectly believes ‘Large-scale nuclear power plants are the only proven technology available today that is deployed at scale to provide continuous, reliable and low-carbon electricity. Our electricity system needs nuclear power.’

The Bill allows the Secretary of State ‘to designate a company to benefit from a Regulated Asset Base (RAB) model.

The RAB model allows a company to charge consumers to construct and operate new infrastructure projects. It allows the company’s investors to share … the project’s construction and operating risks with consumers…’

The government could use this model to get new projects off the ground ‘ … including, potentially, the Sizewell C project in Suffolk, which is the subject of ongoing negotiations between EDF and the Government, as well as potential further projects, such as on the Wylfa site in Wales.’ Greg Hands, Minister of State Department for Business, Energy & Industrial strategy

Public funding for nuclear power

‘The Chancellor’s spending review backs this commitment by providing £1.7 billion to enable the investment decision, alongside a new £120 million future nuclear enabling fund to tackle barriers to deploying new nuclear technology.’ GH

‘The funding model will require consumers to pay a small amount on their bills during the construction of a nuclear project. These payments from the start of construction will avoid the build-up of interest on loans that would otherwise lead to higher costs to consumers in the future.’ GH

 Challenging the government’s position

Alan Brown (Kilmarnock and Loudon) (SNP) ‘On proven technology working alongside renewables, he will be well aware that pumped storage hydro can provide that. Why will the Government not give the go-ahead for Coire Glas in the highlands, which has been progressed by SSE?’

Deidre Brock (SNP) ‘Does he support the tidal energy efforts being made in Scotland? Would he support far more investment in that?

Prohibitive costs of nuclear power (Hinkley Point C):

Alan Brown, (SNP) ‘it is £4.5 billion over the initial estimates, which is 25% over budget…’

The government have ‘… tried to tell us that the eye-watering strike rate of £92.20 per megawatt hour for a 35-year contract, while the cost of offshore wind dropped to £40 per megawatt hour for just a 15-year concession, meant that the nuclear deal was a good deal.’

‘…[minister argues that] the new funding model could potentially save the taxpayer £30 billion to £80 billion. How much money do the Government estimate has been wasted on Hinkley? How many billions of pounds are the Government willing to commit bill payers to if they say they can save up to £80 billion? Logic says that hundreds of billions of pounds would have to be spent to be able to argue that there could be a saving of £80 billion.’ 

‘If Sizewell C saves 25% compared with Hinkley, that is still a capital cost outlay of £18 billion. Surely there are better ways to spend £18 billion. We heard from the right hon. Member for Kingswood (Chris Skidmore) about the number of jobs being created. If I was given £18 billion to £20 billion, I am sure that I could create 30,000 jobs —by the way, that is £730,000-odd a job in capital costs alone. ‘

‘On costs, we are told that a new deal signed under the proposed new funding model in the Bill will cost consumers only £1 a month during construction, but if we look at a 10-year construction period for Sizewell C, we see that that means that bill payers in 28 million households will pay £3.4 billion before it is operational. That is a further £3.4 billion in expenditure when that money could be better invested elsewhere.’

Delays of construction (Hinkley Point C):

Alan Brown, SNP ‘On progress, the commissioning date for unit one has now been put back to June 2026, instead of the anticipated 2025, but they also admit there is a programme risk of up to 15 months on top of that. That means that it could be September 2027 before unit 1 of Hinkley is operational and unit 2 will then follow a further year behind. So it is realistic to say that Hinkley Point C will not be fully operational until 2027-28, which is 10 years after we were initially told that Hinkley Point C was required to stop the lights going out. Given that the lights have not gone out, that undermines the original case for Hinkley.’

Whilst the Labour Party’s official position is to support the Bill, Alan Whitehead, shadow energy minister points out RAB risks:

‘There are also substantial risks with RAB that need to be managed. It places the cost and risk of financing the project on the shoulders of customers, in this instance electricity bill payers, which adds to bill costs through a levy on their bills before anything has materialised. In the event of the plant not being completed, it lumbers them with bill costs without the benefit of the plant for which they have paid producing relatively cheaper electricity.

RAB also adds to the burden of bills unpredictably if the project overruns on cost or time—both of which, as we know, nuclear plant development is rather prone to. The extension of the construction period for a project, when the highest effect is felt on bills, lengthens that higher take period. An increase in cost may also cause revisions to be made to allowable costs ceilings, and hence cause heavier costs on bills.’

‘Nuclear power stations elsewhere in the world have been funded along RAB lines, but have simply not been completed, which has left consumers with a huge bill and no benefit.’

Nuclear waste ‘legacy’ and decommissioning costs

Deidre Brock, SNP
‘… we know that the permanent safe disposal of radioactive waste from nuclear power plants has not yet been achieved by any country. A 2018 study from the department of geology at the University of Kansas recently suggested that nuclear waste disposal would be two and a half to four times more expensive than has been estimated. Those costs will be passed on to those who come after us. Is my hon. Friend satisfied that these possibilities have been fully taken into account in the financing model?’

Alan Brown, SNP ‘It will cost £132 billion to deal with the existing nuclear waste legacy. Why do we want to create another waste legacy for future generations to deal with?

Sarah Olney, Lib Dem ‘I urge the Government not to ignore, in their enthusiasm for nuclear, the considerable downsides of nuclear waste. As a member of the Public Accounts Committee, I visited Sellafield last year, and I hope that every Government Member who promotes this Bill will also take the opportunity to do so. I found it so eye-opening in respect of the consequences of dealing with nuclear waste and the considerable time, effort and money that is still now being spent to dispose of nuclear waste that was generated in the 1970s, before I was born. It was just extraordinary and really brought home to me the literally toxic legacy that we leave for future generations when we create nuclear waste. I am not confident in some of the proposed solutions to deal with it, which could have grave environmental consequences. We cannot be confident that in 50 years’ time people will take nuclear waste seriously and that the right procedures will be in place.

Disparity of investment of nuclear vs tidal

Alan Brown, SNP: ‘What else could we do with that amount of money? We could upgrade all homes to energy performance certificate band C. We could have wave and tidal generation. The UK Government are willing to introduce the Bill and commit hundreds of millions of pounds to nuclear—the Budget has £1.7 billion just for developing nuclear to a negotiation stage—but they will not even ringfence £24 million for wave and tidal in pot 2 of the forthcoming contracts for difference auction. The disparity is clear.’

‘Pumped storage hydro is the perfect foil for intermittent renewables, rather than big, inflexible nuclear power stations that invariably pump energy to the grid when it is not required. An Imperial College report suggests that there could be system savings of £700 million a year from using pumped storage hydro technology instead of nuclear.’

‘In the 2019 World Nuclear Industry Status Report, Mycle Schneider, who was the lead author of the report, said that nuclear power “meets no technical or operational need that low-carbon competitors cannot meet better, cheaper and faster.”

A recent study by Good Energy and the Energy System Catapult demonstrated that carbon emissions from the power sector could be eliminated as early as 2030 without the need to develop new nuclear power. Sarah Darby, associate professor of the energy programme at Oxford University’s Environmental Change Institute, has said: “Nuclear stations are particularly unsuited to meeting peak demand: they are so expensive to build that it makes no sense to use them only for short periods of time. Even if it were easy to adjust their output flexibly—which it isn’t—there doesn’t appear to be any business case for nuclear, whether large, small, ‘advanced’ or otherwise.”

Lib Dems position: support RAB (private sector offloading costs onto consumers). They support construction of Hinkley C but not any further new nuclear power stations

Sarah Olney: ‘I also want to make it clear that it is not our position that we should be closing down nuclear power stations; we support the ones that are currently operational and where contracts have been signed to open new ones. As I want to go on to make clear, our position is very much that there should not be new nuclear power stations. 

‘I strongly back the Government in what they are trying to achieve here, but not for nuclear. I wish to reiterate the Liberal Democrat position: there is currently no economic or environmental case for the construction of any further nuclear stations in the UK. The hon. Member for Kilmarnock and Loudoun (Alan Brown) set out, in his extensive and detailed speech, very much what we believe: there really is not a case for such construction.

Read the full debate here.

A Times Red Box article in April, authored by Ernest J. Moniz, co-chair and CEO of the Nuclear Threat Initiative and former US secretary of energy under Barack Obama 2013-17 and Lord Browne of Ladyton (Des Browne) former UK defence secretary, 2006-08, said the following:

‘In an abrupt change of course, the UK government announced it will increase the cap on its nuclear weapon stockpile by 15 per cent from the current level of 225 — and 44 per cent from their plan to reduce to 180 by the mid-2020s — to no more than 260 warheads. This decision represents a significant reversal from the long-standing position in the UK on reducing the number of nuclear weapons while maintaining a minimum deterrent force.

‘Equally concerning is the decision that the UK will no longer publish details of its operational nuclear stockpile, deployed warheads and deployed missile numbers, a blow to nuclear transparency. The US and Russia both declare the numbers of their deployed strategic warheads and delivery vehicles.’

On 16 September the Prime Minister made a statement on the new military alliance with Australia and the US. Responding to concerns about China’s response, the Prime Minister said the partnership “is not intended to be adversarial towards any other power.”

China and other states in the region disagreed with the PM’s statement.

AUKUS “has seriously undermined regional peace and stability”. China’s foreign ministry spokesperson, Zhao Lijian, went on to say that the announcement has “intensified the arms race and undermined international non-proliferation efforts.”

China accused the UK, US and Australia of double standards over nuclear non-proliferation and of holding on to a “Cold War mentality.”

Indonesia and Malaysia also fear this agreement will start a new arms in the region. Malaysia’s Prime Minister, Ismail Sabri Yaakob, said the project could “provoke other powers to take more aggressive action in this region, especially in the South China Sea.” The Indonesian government issued a statement saying that it viewed the pact “cautiously” and was “deeply concerned over the continuing arms race and power projection in the region.”

CND believes this new alliance is a dangerous escalation in the West’s ongoing confrontation with China, one which risks nuclear proliferation and is in breach of the nuclear Non-proliferation Treaty.

We are asking MPs to sign Early Day motion 493: US-UK-Australia Military pact which urges the government to withdraw from the treaty and abide by the NPT.

Defence Committee takes evidence from Australia and Japan on the new AUKUS military deal

On 21 September, the Defence Committee, as part of its Inquiry into the Navy’s future purpose and procurement, examined the Navy’s role in the Indo-Pacific – in particular the AUKUS alliance with Australia and the US. It took evidence from former Australian Defence Minister Christopher Pyne and Professor Tetsuo Kotani at Meikai University.

A parliamentary debate was held in October on AUKUS and the impact on Anglo-Chinese Relations.

A number of members raised the issue of proliferation, including the SNP as can be seen in the following exchange:

Drew Hendry MP (SNP) “By giving Australia access to sensitive technology in the form of nuclear-powered submarines … is tacitly encouraging nuclear proliferation, which we in the Scottish National Party are morally, economically, environmentally and strategically against.”

Sir Geoffrey Clifton Brown MP (Conservative) “If these submarines are going to carry nuclear weapons, he would possibly have a case, but these are nuclear powered submarines, and nuclear power is a relatively well-known technology that is certainly not covered by the treaties.”

Drew Hendry (SNP) “The hon. Gentleman would make that point, and that would be his defence; I would expect him to do that. However, the fact is that there will be nuclear weapons – nuclear-powered submarines – patrolling as a result of this deal. That is a matter of fact.

As part of the Integrated Review, CND submitted evidence to the Foreign Affairs Committee on Defence Industrial Policy: Procurement and prosperity.  All submissions are here, where you can also read the CND submission.

 

Yesterday, Ben Wallace at Defence Questions: ” It is really important that the integrated review reports at the same time as the comprehensive spending review, which is due in the autumn.”   Hansard entry here.

There was an exchange around leaving the EU.

Julian Lewis MP: “I am glad that the Secretary of State has been making representations to the US about the importance of not cutting conventional forces in Europe, but can we make such representations if we ourselves have any intention to do what is reported in the press—namely to inflict swingeing cuts on the Army and to revisit the argument we won two years ago about the Royal Marines’ amphibious capabilities? Does he accept that, although we have 21st century threats to meet, that is additional to, not a substitute for, the conventional preparedness we need to maintain?”

Ben Wallace: “My right hon. Friend has been in this House long enough to know that he should not believe everything he reads in the newspapers, especially around the time of an integrated review. We in the United Kingdom believe that, as the motto of Sandhurst says, we serve to lead. We lead by contributing and giving, which we have done over the history of NATO. We are the biggest contributor to NATO in Europe. We are the provider of NATO’s nuclear defence in Europe, and we will continue to be a main leader in NATO. That is how we will see off the threats we face from the likes of Russia.”

Last week UK Chargé d’Affaires to the UN,  Ambassador Jonathan Allen made a statement to the UN Security Council meeting on non-proliferation:

“We have also frequently stated our unequivocal regret and concern at the United States decision to leave the JCPoA and to reimpose sanctions on Iran. We understand the continued impact this has had in Iran and on the Iranian people.”

In May, Liberal Democrat spokesperson on defence Lord Campbell, asked what steps the Government is taking “to ensure Continuous At Sea Deterrence until the deployment of the first Dreadnought submarine”.

Baroness Goldie responded saying the “Government is committed to maintaining a Continuous At Sea Deterrence posture for as long as the global security situation demands. We are providing the investment and resources to maintain the VANGUARD Class to assure the transition to the Dreadnought Class”.

It should be a government’s priority to keep people safe, whilst also recognising the true security threats of the 21^st century.

Since the above exchange it has been suggested that as part of the Integrated Review, Vanguard may be broken up for parts to keep the other three Trident subs going until the replacement comes on stream. Read more here.

We have mixed messages on the progress of the Integrated Review. At Defence Committee on the 22^nd of April, Secretary of State for Defence, Ben Wallace, said that work has commenced on the Integrated Review (IR) although it has been paused.  He also said it will recommence this autumn however he does not have an exact date.

Later the Secretary of  State went on to say that the Integrated Review had not been suspended it had just slowed down.

Confusingly, when questioned again on the Integrated Review, he went on to say that the Review will be the end of this year and not next but again he hadn’t got an exact date.  When pushed on whether it was recommencing or we’ll see a final conclusion at the end of the year he said, “err… I think for commencement.”

One might assume from this that the government is pushing ahead with the review, silently. Or then again, maybe not.

In February the Defence Secretary was forced to admit that the UK was going ahead with a new warhead for the Trident replacement submarines which will be co-produced with the United States.  However the Secretary of State only admitted this after MPs heard it via a Pentagon statement instead of hearing it from our government. 

 A public meeting of the International Relations and Defence Committee sat in the Lords on the 26^th February.  The objective was to follow up on the inquiry into rising nuclear risk, disarmament and the Non-Proliferation Treaty ahead of the conference scheduled in the spring.  Senior officials from the Civil Service, giving evidence to the committee were: Samantha Job, Director, Defence and International Security, Foreign and Commonwealth Office; Sarah Price, Head, Counter-Proliferation and Arms Control Centre (CPACC), Foreign and Commonwealth Office; James Franklin, Head of Nuclear Policy, Ministry of Defence

 You can watch the full exchange here.  

The Chair of the committee asked the MOD representative to comment on the sequence of events which led to the information issued by the Pentagon about the UK governments plans to renew the Trident warheads before Parliament was aware.  As she said “the cat had been let out of the bag”.

 James Franklin said it was important to look at the context of what the US announcement was in that process and the US hasn’t made a decision yet on whether to replace the warhead.  There is a plan in place and this was them approaching congress to do that.  He went on to say “I don’t think there has been any miss-engagement with Parliament in that process.”

Lord Reid asked to panel what developments there are in both the New START and the Open Skies Agreement. In particular whether the US was considering withdrawing from the Open Skies and what the UK’s current position is on the Treaty.

On the question Open Skies, Sarah Price said the government were fully supportive of the Treaty; this is an active area of engagement and that the “process of consideration for US withdrawal from the Treaty is still on-going”. In  regards to the New START, Samantha Job explained that the UK government was regularly talking to the US Administration, however the “New START doesn’t cover everything and doesn’t cover some of the missiles and technologies that Russia has announced it’s going to have.”

Budget

There was much discouragement of the government announcing it is to spend more than £900 million on nuclear fusion, space and electric vehicles as a “raft of other green measures”.  There was little in the budget in support of the environment and nothing around scraping the wasted £billions needed to replace the obsolete Trident.  Instead the Chancellor promised to  “support the most energy-intensive industries to transition to net zero” by extending the climate change agreement scheme for a further two years and has pledging to introduce a new plastic packaging tax from April 2022.

Strategic Defence and Security Review

The Guardian is reporting that a Downing Street spokesperson has confirmed that the Comprehensive Spending Review has been postponed “so that government remains focused on responding to the public health and economic emergency. Further details of when the comprehensive spending review will be held will be set out in due course.”

Defence Secretary Ben Wallace stated the four areas the government will be working on are: the Euro-Atlantic alliance, great power competition, global issues and homeland security. 

Questions

At Defence questions in March, Caroline Lucas asked the Secretary of State for Defence, what steps he plans to take to ensure that close work with the US on new warhead development is compatible with UK obligations under article 1 of the 1970 nuclear Non-Proliferation Treaty not to transfer nuclear warheads or other nuclear explosive devices to any recipient whatsoever, directly or indirectly; and what recent estimate he has made of the (a) cost and (b) completion date of the proposed Trident warhead replacement programme.

The answer came from Jeremy Quin: “As we have previously stated, the replacement warhead is not required until at least the late 2030s, and the programme to deliver it will be subject to the Government’s major programme approvals and oversight. We are withholding specific information about cost and in-service dates for the purposes of safeguarding national security.”

Labour MP Tan Dhesi asked with reference to the Government’s announcement entitled, £500 million for Faslane, published in August 2015, what the objectives are of that upgrade; and what progress he has made on completing that upgrade.

 Again, Jeremy Quin responded:

The Clyde Infrastructure Programme was established in 2015 to coordinate the delivery of multiple infrastructure projects to build new or upgrade/update existing facilities within the geographically constrained sites in Her Majesty’s Naval Base Clyde, while ensuring the Naval Base could concurrently support Continuous at Sea Deterrence.

There are currently fourteen active projects within the programme. The total programme value is estimated at £1.6 billion over fifteen years.

At Foreign Office Questions on the 3 March, Shadow Foreign Secretary Emily Thornberry asked what recent discussions the Foreign Secretary had had with his counterpart in the United States administration on the potential for a new nuclear deal with Iran.

James Cleverly responded saying, “We remain in close contact with the US at a number of levels. The Prime Minister spoke to President Trump on the 20 February and the Foreign Secretary met with Secretary Pompeo in London at the end of January, covering a range of bilateral issues.” He went on to say that “The Joint Comprehensive Plan of Action remains the best means available to prevent Iran from acquiring a nuclear weapon.  We remain committed to the deal as our E3 leaders reaffirmed unequivocally on the 12 January…”