Theresa May's Hinkley pause creates nuclear row with the Chinese

Written by Tom Smithard on 1 August 2016 in Diary

Days after the deal for a new reactor at Hinkley Point is postponed, a minister threatens to resign and the Chinese publicly express their anger.

Just weeks after taking power Theresa May has landed her first major diplomatic row – with the Chinese government going nuclear over plans to pause the new reactor at Hinkley Point.

Speculation has been rife over the reasons behind the last-minute delay in signing a contract with EDF, with May’s government keen to play down rumours that the decision was down to fears of Chinese control over national infrastructure.

While EDF, which is 85% owned by the French government, is due to contribute two-thirds of the projected £18bn cost of the project, the final third would come from the Chinese General Nuclear Power Group – a deal inked by David Cameron and President Xi Jinping during last October’s state visit, following groundwork laid by George Osborne when chancellor.

An article by May’s chief of staff Nick Timothy (pictured above), written last October for the ConservativeHome website, was unearthed warning that security experts “inside the government” were worried the Chinese would be able to “shut down Britain’s energy production at will”.

Fuel was added to the fire by Sir Vince Cable, the former business secretary, who revealed over the weekend that Theresa May had a “general prejudice” against the Chinese which she raised in cabinet meetings, citing “national security concerns”.

And former energy secretary Sir Ed Davey today provides a further clue, telling the Daily Telegraph that George Osborne blocked his proposal for a government ‘special share’ in the Hinkley Point scheme which would have provided extra protection from national security threats.

The government has refused to comment on the claims by the two Liberal Democrats but this morning the Chinese government let it be known it was unhappy with any suspicion of its motives for investing.

Xinhua news agency said China understood and respected Britain’s requirement for more time to think about the deal. However, it said:

“What China cannot understand is the ‘suspicious approach’ that comes from nowhere to Chinese investment in making the postponement … If history offers any guide, many China-targeted suspicions have been boiled down to diffidence and distortion. 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 co-operation.”  

Such commentaries are not government statements, but offer a reflection of official thinking.

May might also have to contend with her first ministerial resignation if the deal does not go ahead, with friends of Lord Jim O’Neill – a Treasury minister close to George Osborne and charged with building relations with China – telling the Financial Times today that he will leave the government in September unless the prime minister can explain her change of tack over China.

Theresa May will have to be at her most diplomatic to dampen down the developing row with both the French and Chinese governments. Her foreign secretary Boris Johnson has been conspicuous by his silence over the weekend – can that last much longer?

Picture by: Dominic Lipinski/PA Wire/Press Association Images

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Rob H. (not verified)

Submitted on 2 August, 2016 - 19:43
It's not a way forward to have 'business partners', such as the French and Chinese and even our 'Special Relationship' US buddies, who resort so quickly to threats and blackmail when trade deals are not going their way, it reflects previous Governments both labour and conservative, spending to buy votes rather than spending on long term national projects, and Ministers consequential weakness and dogged determination to rely on foreign expertise and technology rather than developing our own. This is where the step change in thinking, needs to be encouraged and developed. UK developed home grown energy solutions, Economic transport infrastructure, Country wide fast broadband, Manufacturing industry encouragement. A new integrity and lack of naivety by our ministers negotiating foreign investment.