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Nuclear gravy train starts to roll

Tomorrow the Government will authorise the first of a series of subsidies to the nuclear industry which will bankroll its future to the tune of more than £1.3bn by 2020, in direct contradiction to pledges repeatedly given by Ministers that any new nuclear build would receive no public subsidy at all.   Yet clause 77 of the Finance Bill being debated in Committee tomorrow will offer huge windfall profits to nuclear because it introduces a carbon floor price which increases the cost of emitting carbon for coal and gas, but nuclear will be exempt because it does not emit carbon.   Nor is this the only large subsidy that this virulently pro-nuclear government, even after Fukushima, plans to shower on the nuclear lobby.

In its electricity market reform package which the Government will unveil next month in a White Paper, it is proposing to issue contracts with guaranteed prices for nuclear electricity.   This is of course a repudiation of market forces which they insist on imposing, unhindered and unregulated, in every other context.   It represents a huge transfer of risk to the consumer/taxpayer, and worse, if it is claimed that the contracts are commercially confidential, this sleight-of-hand will be concealed from public scrutiny.   It may be used to allow a shift of construction and operational risks, including under-performance, on to the taxpayer in order to protect investors (though last year EDF and Centrica made a combined profit of well over £3bn).

Then there are the £15.7bn subsidies planned for radioactive waste management and long-term disposal of highly toxic material.   These costs, which obviously should be borne by the industry itself, will be brought on to the public balance sheet through ‘waste transfer’ contracts.

Then there’s the little matter of insurance if a cataclysmic accident or breakdown occurs.   The Government are proposing that the industry won’t have to pay more than the first £1bn of the costs.   Over and above that the taxpayers take the hit – in the financial sector it’s call a bail-out.   In the case of nuclear it may be even more horrendous since some estimates put the liabilities resulting from Fukushima as high as $100bn.

Then to cap it all, the Government’s Business Department is working on how to use the new publicly-funded Green Investment Bank to fund nuclear reactors – adding insult to injury when this Bank was supposed to usher in the renewables revolution.

The real point is: if nuclear is so broken-backed, dangerous, and wildly expensive as to need all these vast secret subsidies, why are we building it at all in the first place?

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