Clegg has already broken his promise on nuclear subsidies

Joss Garman reports on the politics behind the future of nuclear subsidies.

Nuclear power plant

The front pages of The Daily Telegraph and The Guardian today report comments from deputy prime minister Nick Clegg that new nuclear power stations may no longer be built in the UK.

Clegg reportedly said:

“We have always said there are two conditions for the next generation of nuclear power stations. Firstly, they must be safe and, secondly, we cannot let the taxpayer be ripped off, which is what has always happened in the past.

“There will be no rowing back from the coalition agreement on this, which means there will be no public subsidy. The coalition agreement was very clear.”

As I’ve previously detailed for Left Foot Forward, there are already a planned series of hidden public subsidies designed to make new nuclear plants in Britain possible so ministers including Clegg are already breaking this promise.

One of these hidden subsidies was announced in last week’s budget, and will see billions in taxpayer cash handed to the nuclear industry, including for their existing nuclear stations. As Channel 4’s Krishnan Guru Murphy put it on his blog:

“Your energy bills are going to rise to pay the French.”

Because one of the main beneficiaries is likely to be the French state-backed utility, EDF. On budget day The Times also reported (£) that the introduction of the new floor price for carbon would lead to “invisible subsidies for offshore wind and nuclear power”.

It has been convenient for all three main parties to operate a cross-party consensus on subsidies for nuclear power – that is, to provide them to the industry on the quiet, whilst opposing them in public. This way, the leadership of each party hasn’t really needed to defend itself against accusations they were giving hand outs, but at the same time, they could be reasonably confident new plants would be built.

However, Clegg’s comments yesterday suggest that all this may be about to change. He appears to be drawing a line in the sand, indicating that no more hand-outs will be allowed, even if these are considered necessary by the pro-nuclear lobby, to offset increases in costs arising from the Japanese disaster.

The Daily Mail quotes a Lib Dem source saying that after the recent accident:

“We could be in a situation now where the potential costs and liabilities are higher – that makes it much harder to get private investment.”

This is simply a statement of the obvious. Costs are undoubtedly going to rise for new nuclear following the accident at Fukushima, and it was already the case that no nuclear station has ever been built anywhere in the world without public subsidy. Even for nuclear supporters, the economics of nuclear following events in Japan look more problematic than ever. As the energy secretary Chris Huhne has said, events at Fukushima have:

“undoubtedly cast a shadow over the renaissance of the nuclear industry.”

Clegg may have calculated that with this in mind, the cross party consensus of denying public subsidies would start to become an untenable line. Either his party would need to accept more nuclear subsidies, or it would need to accept the coalition’s nuclear plans would be scaled back or even stopped altogether. His comments indicate that he would prefer to take a punt on the latter, and not the former – perhaps not sure how his party would accept another broken promise just now.  The real question though, is where does this leave Chris Huhne – who has been able to secure Tory support for his low-carbon transition plans, at least in part because of the security they provided to the allies of the nuclear industry.

The Lib Dems have historically had a strong anti-nuclear position. Before the election they claimed to be committed to opposing a new generation of nuclear plants in the UK, saying they were committed to “100 per cent carbon-free, non-nuclear electricity by 2050”. Before the election Huhne himself called nuclear a “failed technology”.

Ironically since then, he has not only u-turned and allowed hidden nuclear subsidies to slip through – but at the same time, his party has lost a series of key battles for measures which could have secured investment in the viable alternatives to nuclear – energy efficiency, renewable energy, and CCS.  

Some might even argue that it’s a little late for Nick Clegg to remember his party’s principled position on nuclear power, when last week saw him cave in to demands from the treasury, to delay the introduction of borrowing powers for the Green Investment Bank. Delays on the GIB, assaults on the newly introduced feed-in tariff, and a general conviction that the coalition preferred nuclear power and gas to wind, solar and tidal power, has seen the a huge slump in investor confidence in renewables investment in the UK. Yesterday the BBC reported green investment in the UK has fallen by 70 per cent in the last twelve months.  

Clegg and Huhne will need to force a major re-think on green investment inside the government as a whole, and particularly inside HMT, if they want their promises on nuclear power and carbon targets to mean more than they have done on tuition fees.

42 Responses to “Clegg has already broken his promise on nuclear subsidies”

  1. Ma

    RT @leftfootfwd: Clegg has already broken his promise on nuclear subsidies: http://bit.ly/gU1esm reports @JossGarman

  2. Mancunian Candidate

    RT @leftfootfwd: Clegg has already broken his promise on nuclear subsidies: http://bit.ly/gU1esm reports @JossGarman

  3. Tim Douglas

    RT @leftfootfwd: Clegg has already broken his promise on nuclear subsidies: http://bit.ly/gU1esm reports @JossGarman

  4. Joss Garman

    New post for @leftfootfwd – how Nick Clegg is already breaking his promise on #nuclear subsidies http://bit.ly/fdI6Su

  5. Caspar Henderson

    RT @jossgarman: New post for @leftfootfwd – how Nick Clegg is already breaking his promise on #nuclear subsidies http://bit.ly/fdI6Su

  6. Will Bugler

    RT @jossgarman: New post for @leftfootfwd – how Nick Clegg is already breaking his promise on #nuclear subsidies http://bit.ly/fdI6Su

  7. Darren Johnson

    Has Clegg already broken promise on no nuke subsidy? As energy bills rise to pay for French nuke companies http://bit.ly/fHifnZ #nuclear

  8. Spir.Sotiropoulou

    RT @leftfootfwd: Clegg has already broken his promise on nuclear subsidies http://bit.ly/etYGFh

  9. Chris Jenkinson

    “Because one of the main beneficiaries is likely to be the French state-backed utility, EDF. On budget day The Times also reported (£) that the introduction of the new floor price for carbon would lead to “invisible subsidies for offshore wind and nuclear power”.”

    I can’t read the full article, but from this quote the Times is just wrong. Penalising carbon-intensive forms of energy – because carbon dioxide is a greenhouse gas and contributes to climate change – does not mean that nuclear is being subsidised, any more than wind farms are subsidised solely by the carbon floor price. The carbon floor price is a welcome baby step towards making polluters pay the full environmental costs of their pollution.

    Defining this as a subsidy for energy production not emitting CO2 is a misuse of language. It is the same as saying that fining those who park illegally is a subsidy for people who park legally.

  10. Jamie Reed MP

    Every single energy source has some ‘subsidy’ or other – that’s a fact. The debate over nuclear vs.renewables is over and has been for some time. Has never been a binary debate – the reality is we need both. Something we don’t need, however, is a dangerously confused deputy prime minister incapable of putting the national interest over his political survival within his own party.

  11. Joss Garman

    Hi Chris –

    According to the OED, a subsidy is any charge imposed by government to keep down the price of a commodity or service. In other words, it is the intention that makes it a subsidy. With that in mind, pretty clearly the carbon floor price does act as a subsidy.

    Here’s a post from WWF on the topic where they put numbers on it:
    http://www.wwf.org.uk/wwf_articles.cfm?unewsid=4625

    However, the floor price is just one of a number of subsidies planned.

    You only have to look at Japan where taxpayers are having to bail out one of the biggest energy companies in the world to see another example of how the nuclear industry cannot stand on it’s own too feet.

  12. Anon E Mouse

    Chris Jenkinson – Joss Garman has form on misleading people. This posh boy eco toff has never explained a credible alternative energy solution although I suppose someone could invent a machine that ran off his hot air.

    Perhaps Mr Garman would care to explain how we can keep incubators running at the hospital with one of his windmills when it is a calm day?

  13. Duncan Stott

    Isn’t the carbon floor price a subsidy for existing nuclear power, not the next generation?

  14. Chris Jenkinson

    A subsidy is financial assistance paid by the government to an individual or organisation. It is not a charge to an individual or organisation. That is a penalty. The carbon floor price is not a subsidy.

    Electricity and gas prices will rise because of the carbon floor price. That means that electricity and gas prices will more accurately reflect the true cost – particularly the environmental cost – of producing energy. If power companies can produce energy more cheaply than the market price of coal power stations then that does not mean they are being somehow subsidised by the taxpayer. It means that historically coal power was subsidised by the taxpayer as the general public have to bear the costs of climate change, and that is now appropriately being transferred to coal power producers.

  15. Joss Garman

    Duncan – yes it does provide a windfall from existing plants that would have operated anyway, yes.

  16. Chris Jenkinson

    Anon E Mouse (why no real name?) I’m afraid I don’t know Joss, but Left Foot Forward is a high profile blog with a good reputation and I doubt they would want to ruin that with publishing articles which intentionally mislead people.

    Duncan, as I mentioned, the carbon floor price is not a subsidy at all. It is a financial penalty.

  17. Will Straw

    Brilliant blog by @JossGarman on Clegg's broken promise on nuclear and the Coalition politics of energy: http://bit.ly/gU1esm

  18. Lynda Waltho

    RT @wdjstraw: Brilliant blog by @JossGarman on Clegg's broken promise on nuclear and the Coalition politics of energy: http://bit.ly/gU1esm

  19. Scott Redding

    RT @wdjstraw: Brilliant blog by @JossGarman on Clegg's broken promise on nuclear and the Coalition politics of energy: http://bit.ly/gU1esm

  20. Anon E Mouse

    Chris Jenkinson – No real name because the validity of my comments aren’t dependant on it and I don’t want to be smeared as often happens with Labour supporters – ask David Kelly’s widow or Peter Watt.

    Regarding Garman there is so much to choose from regarding the inaccuracies in his articles from “100 Critical Days To Save The World” (August 2009) to general waffle and manipulation of facts to suit his case.

    What I really object to is his support for people misleading governments over (essentially his dislike of) GM food where thousands of Africans were left to starve to death:

    http://www.leftfootforward.org/2010/11/what-channel-4-got-wrong/

    It’s just a pity that people with worry free privileged backgrounds like his don’t try to walk a mile in other peoples shoes before they start preaching their outlandish nonsense…

  21. Jan Bennett

    RT @wdjstraw: Brilliant blog by @JossGarman on Clegg's broken promise on nuclear and the Coalition politics of energy: http://bit.ly/gU1esm

  22. Trojan Horus

    To commit a Clegg is the new catch all verb to break a promise. There’s more toxic leakage of promises not being fulfilled and being U-bent by the Lib-Dems than Fukushima’s radiation levels.

    There are so many stories about cuts it’s almost impossible to know where to point the finger first… Today’s headlines alone have cuts to the Arts and cuts to legal aid… both subjects I’d have thought dear to the hearts of liberal voters.

    more really a fukuvoters

  23. EyeSeeSound

    “Perhaps Mr Garman would care to explain how we can keep incubators running at the hospital with one of his windmills when it is a calm day?
    Comment by Anon E Mouse on March 30, 2011 at 5:00 pm”

    Ha ha, yep, i’m sure his entire alternative proposal is based on one windmill, and in particular it being hooked up to a hospital and utterly reliant on the wind strength on any given day.

    I have no knowledge of him or the facts but I doubt your example holds any water as a real life one. Still, never let the facts get in the way of a good slagging hey Mr/Ms Mouse.

  24. Joss Garman

    Chris – The energy Market is being designed in such way as to give a significant financial benefit to the nuclear industry. Of course the principle of taxing pollution is a good one, but there is substantial evidence that this carbon floor price will offer no significant boost to renewables, it may even undermine them. However it will results in huge benefits to the failing nuclear industry. That’s no accident. The measure can’t be seen in abstract. It’s also worth pointing out that there will only be a certain amount of energy investment. Right now the coalition are gearing the Market in such a way as to cause investment that could go into renewables to go into nuclear instead.

  25. Rich

    So the government introduces a new measure that makes high carbon output power production more expensive. Nuclear power isn’t hit by this due to its nature. So therefore the government is in favour of nuclear power. That chain of logic is certainly one of the more stupid things I’ve seen, and I’ve been laughing all day at the No to AV campaign.

  26. Chris Jenkinson

    Joss, I am sorry to have to disagree with you once again because I think we are generally on the same side in the fight against climate change. However we can only win if we are intellectually honest.

    A carbon floor price gives a financial penalty (hopefully a significant one) to carbon-intensive forms of energy. It does not give a financial benefit to the nuclear industry or particularly to renewables, as Rich points out, as they would remain as costly as they are at the moment. I’m failing to see how nuclear benefits from this any more than renewables.

    Please stop using words and phrases like subsidy to describe financial penalties. It’s inaccurate.

  27. Joss Garman

    Well Chris, we may have to agree to disagree on the word ‘subsidy.’

    But I’m not the only one who considers this floor price a subsidy for nuclear. Here are a few others.

    Professor Tom Burke CBE – an adviser to Rio Tinto and Professor of energy at Imperial who refers to the carbon floor price as one of the subsidies for nuclear in a speech here: http://www.nomoney4nuclear.org.uk/Remarks%20by%20Tom%20Burke.pdf

    Peter Atherton too, head of European utilities at Citigroup, told the Sunday Times here: http://www.thesundaytimes.co.uk/sto/business/energy_and_environment/article290274.ece

    “Putting a floor under the power price would effectively transfer risk from the nuclear developer to the electricity consumer.”

    Here’s the energy spokesman for the SNP, Mike Weir, quoting figures from Redpoint energy consultancy and also referring to the measure as a subsidy for nuclear: http://www.angussnp.org/24_03_11.htm

  28. Anon E Mouse

    EyeSeeSound – Actually I’m being generous. To date Mr Garman hasn’t provided any solution to any problem he has illustrated (besides agreeing with advice to starve people in Africa rather than give them perfectly safe GM food under the lie that it was some American conspiracy against them) and all he does is spend his days on his self promotion.

    Mentioning one hospital and a windmill was to make my point clear that renewable energy is simply not sufficient enough to power a modern Western democracy and that the pathetic rantings of a posh boy eco toff, like himself, are fine if you can afford this nonsense. The majority of people in this country cannot.

    For the rest of us in the real world we simply do not have the luxury of living out of our parents pockets and people struggle to fill a car with petrol to get to work. We do not have the time to swan around lecturing to others about how to live their lives.

    And the truth is not “slagging” someone off as you put it. It’s just the truth….

  29. simon clydesdale

    RT @wdjstraw: Brilliant blog by @JossGarman on Clegg's broken promise on nuclear and the Coalition politics of energy: http://bit.ly/gU1esm

  30. Joss Garman

    @ Jamie Reed MP: The debate over nuclear vs. renewables is not “over” though given you worked in PR for the nuclear industry for a number of years, and given the nuclear industry is one of the biggest employers in your constituency, perhaps ‘you would say that wouldn’t you.’

    That aside though, surely even you would have to concede that when those brave engineers are battling to prevent meltdown at Fukushima, and when the UK’s Energy Secretary admits there is a “shadow” hanging over the nuclear renaissance, and as Germany and China suspend their nuclear programs, the debate is very much alive is it not?

    Nuclear technology is a mature technology, and subsidies exist for renewables because they’re not mature technologies. That is a major difference. The nuclear industry has proven it cannot stand on it’s own two feet. Renewables in the UK haven’t had the opportunity to prove anything one way or the other. However, where renewables have been rolled out at scale – with state support – they have proven to be a major success. For example, in Spain where wind power has produced more than 50% of the country’s electricity.

  31. Pete Rowberry

    It is difficult for the nuclear industry to stand on its own two feet when the results of a nuclear accident are so unpredictable and so catastrophic. Chris Huhne, shortly after being appointed Secretary of State at DECC, made it clear that the government underwriting the liability of the nuclear industry in the event of an accident must go. Now, he supports consultation which recommneds an increase in the limit from £10 million to a mere £1 billion. More politicians broken promises. They don’t even know when they vare lying. They just open their mouths and it happens.

  32. Chris

    Mental Mousey says: “No real name because the validity of my comments aren’t dependant on it”

    What a two-faced, hypocritical clown. You seem to be holding Joss Garman’s background against him, and suggesting the validity of his comments are dependant on it. Idiot. Come out from the shadows and tell us who you are and what your background is so we can judge you like you judge everyone else. You’re a chicken…

  33. Powerbase

    Nick Clegg has already broken his promise on nuclear subsidies | Left Foot Forward http://ow.ly/4qcPd

  34. Spinwatch

    Nick Clegg has already broken his promise on nuclear subsidies | Left Foot Forward http://ow.ly/4qcPV

  35. tom burke

    The difference between a subsidy and a penalty charge is simply meritricious hair-splitting, akin to arguing over angels and pinheads. The penalty charge is nothing more than the mechanism the government has adopted to provide, by stealth, a subsidy for the nuclear induistry by forcing consumers to pay more for their competitors electricity. Its intent is clear both from the go=vernment’s own statements and those of the CEO of EDF, namely to alter the competititve advantage of one business against another. That’s a subsidy and to argue otherwise is simply to distort the meaning of words – a very dangerous road to start down as Orwell warned us.

  36. Anon E Mouse

    Chris – Your rude response and inappropriate over reaction displays exactly why the left are rightly accused of smearing – ask Alistair Darling. Please calm down Chris.

    Regarding Joss Garman’s background please explain why it seems to be OK to judge someone on their education over which they have no control, for example going to Eton, or their privileged background, like Cameron or the countess toff Harriet Harman? Do you not remember how the Tory Toffs campaign backfired Chris?

    It seems to be OK for the left to be rude about people but no one else.

    I illustrate Garman as being an absolute example of someone not living in the real world and telling other people how they should live their lives when it doesn’t affect him. Stupid things like the excessive tax on petrol are hard to pay for by normal people but for him it makes no difference and that is selfish and cruel.

    The validity of his comments should take everything into account but since he has never had to worry about the price of anything how can they? You criticise Cameron for not living in the real world, a point on which I agree and with this character it’s exactly the same.

    His support of those blocking that GM food to allow those Africans to starve to death was a particular low and as I said at the time it wouldn’t affect him as he sat down to eat his organic muesli.

    What is really sad is how the Labour Party once represented the working man before it became full of career politicians like the tax avoiding Ed Miliband who has never done a single days work in his life and I just wish the party could recapture its roots. I remember you laughing because I wasn’t earning much above minimum wage Chris and you thought that was highly amusing. Do you really think Harold Wilson would have found that funny?

    All I want is real Labour to come back and represent the working classes rather than a few irrational angry young men which incidentally is exactly how you come across from your obnoxious ramblings Chris.

  37. Daniel Pitt

    Clegg has already broken nuclear subsidies http://t.co/ElRtxqj #ConDemNation #fraud #liar

  38. More nuclear subsidies, more broken coalition promises | Left Foot Forward

    […] are financial benefits in addition to the windfalls – described in my last blog post – that the nuclear industry can also expect from the introduction of the carbon floor price. […]

  39. Sam

    Why trust EDF??
    Leaked document (in French) from EDF energy in 1983 showing how exposures to electromagnetic fields are dangerous to human health

    http://www.next-up.org/pdf/EDF_Document_CEM_et_Sante_Publique_Extraits_liberalises_27_07_2010.pdf

    The French have more experience of this company and it is not good.
    http://www.next-up.org/France/EDF.php

    Impact on health and Political issues
    Bio-electromagnetism and the human body
    Studies of electromagnetic pollution in the environment

  40. Sam

    There is a new book by the Russian scientists on Chernobyl?

    It talks about 985000 people having been killed as a direct result of the fallout

    Its a review of 5000 studies and published by the New York academy of sciences

    http://eu.wiley.com/WileyCDA/WileyTitle/productCd-1573317578.html

    Chernobyl: Consequences of the Catastrophe for People and the Environment
    Alexey V. Yablokov (Editor), Vassily B. Nesterenko (Editor), Alexey V. Nesterenko (Editor), Janette D. Sherman-Nevinger (Editor)

    http://www.globalresearch.ca/index.php?context=va&aid=23745
    Gives a review with more information

    Dr Busby is the UK’s expert on nuclear and understanding the correct model of radiation dose.
    (of course the ‘authorities’ ignore what happens once one ingests radioactive particles, which is what most people will be doing after Japan. They refuse to see how once a particle is lodged in a particular part of the body and continues to emit radiation that that part is hugely under threat and will likely degenerate into cancer)

    http://www.llrc.org

  41. Anon E Mouse

    Sam – Which may all be true but what does that have to do with the subsidies or otherwise?

  42. Coalition subsidy for nuclear could spark major political fallout | Left Foot Forward

    […] implications should not be underestimated. Before the 2010 general election, the Liberal Democrats made it clear nuclear power should not be part of the UK’s low-carbon […]

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