John Leech MP writes: New £1bn nuclear windfall must be taxed

On Monday, MPs will be asked to vote through £1 billion in windfall profits to existing nuclear operators for doing absolutely nothing new. We fought the last general election on the promise of opposing new nuclear power and certainly reject public subsidies for nuclear power.

Whatever your take on nuclear power though, surely it’s unjustifiable and politically untenable to hand out £1 billion to EDF and Centrica directly from consumer purses, when people are already feeling the squeeze.

The windfall will do nothing to ensure new electricity generation, nothing to help us meet our renewable energy targets and nothing to build popular support for the competitive low carbon economy that we all need.

As a party, we saw this coming and voted at Conference last year to “ensure that any changes to the carbon price do not result in windfall benefits to the operators of existing nuclear power stations”. Meanwhile, the Energy and Climate Change Select Committee has asked that “the Government explains how it plans to deal with the problem of potential windfall profits arising from the introduction of a Carbon Price Support” and that “if such measures involved a tax, then any revenues should be matched by an increase in the budget of the Green Investment Bank.”

We now have a chance to show real leadership on this issue. We should ensure the carbon floor price isn’t introduced before Danny Alexander has also introduced a windfall tax to boost the coffers of the Green Investment Bank. This money could then be invested in low carbon technology innovation funds for heavy industry, for new renewable technologies and, crucially, for insulating the homes of the fuel poor.

As my colleague Adrian Sanders said recently, referring to tuition fees, the party “would be ill-advised to break another part of the Coalition Agreement by supporting the Tories on nuclear power.”

There is huge potential for the UK to become a world leader in the rapidly growing £3.2 trillion global market for low carbon good and services, and to benefit from the resulting jobs and economic growth. Rather than fritter money away on our nuclear past, we should use it to invest in the future.

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8 Comments

  • The best low carbon technology is nuclear… perhaps we should fund the Green Investment Bank by £1bn and then they can pass that on to the nuclear industry instead.

  • Gareth Epps 1st Jul '11 - 3:53pm

    John is absolutely spot-on. I blogged about this at http://www.garethepps.org.uk earlier in the week. One thing – even the Tories don’t believe in subsidising nuclear, or at least they didn’t before the election.

  • John is absolutely right.

  • Neale Upstone 2nd Jul '11 - 12:19pm

    Can somebody explain the “what” behind the ranting here, as I so far don’t see a subsidy.

    [I don’t have the liberty of time to go looking either, so I’ll comment from what I understand of the situation]

    What I see is what we promised. No subsidy for new nuclear, and to solve the problem of a long term stable carbon price. A floor price has been needed ever since the ETS came in. When the EU moved to auctioning permits, we had the perfect opportunity.

    Finally we’re moving on that problem.

    Sorry folks, but LibDem policy is *not* “no nuclear”. It is that nuclear should compete on a level playing field.

    If nuclear is suddenly profitable, it’s because it’s low carbon.

    The problem here is the problem we’ve had with coal vs gas. Coal is cheaper per megawatt to produce than gas. However gas has historically set the price of electricity because we cannot fill all our demand from coal, so all coal producers can come in just under the price for gas.

    Nuclear has become the new coal in the electricity market.

    If our MPs and party president are to wade in on this, then can we at least support a floor price on carbon, and argue about the nature of the electricity market.

  • Neale Upstone 2nd Jul '11 - 1:52pm

    It makes me angry… that our Parliamentary politicians often seem to see their job to be opportunists rather than problem solvers, yet when we’re say on policy working groups, we’re trying to work out policy that can actually solve problems.

    The problem the above article is trying to solve is the LD approval rating.

    The problem the carbon floor price is trying to solve is the future of our planet for our children.

    Get a grip folks!

  • Neale Upstone 2nd Jul '11 - 1:53pm

    typo [say] should be [sitting]

  • Ian Eiloart 4th Jul '11 - 10:56am

    Neale is right. There’s no windfall for Nuclear here. If the carbon floor tax means that existing nuclear providers end up selling more electricity, because it’s low carbon, then that’s just fine. And, if the price of electricity is going up because it’s necessary to prevent global waming that’s fine, too. What nuclear is getting here is a level playing field for low carbon technologies, not a subsidy.

  • David Evans 6th Jul '11 - 11:09am

    “There’s no windfall for Nuclear here.”

    Let me see, we give millions to a few favoured companies for doing nothing new, and some try to say it’s not a windfall. Absurd.

    The problem is that so many green initiatives seem to hinge on the giving enormous amounts of money away and then justifying it with an “It’s for the good of the planet.” The problem is that the money then gets distributed in the form of higher directors’ bonusses, extra unearned dividends etc, which then get used to increase personal expenditure – foreign holidays, new bigger car etc etc. I wonder if the full impact of these things are ever looked at before the act gets passed.

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