Lib Dem MPs set to rebel over ‘back-door’ nuclear power subsidy

‘Liberal Democrats have long opposed any new nuclear construction. Conservatives, by contrast, are committed to allowing the replacement of existing nuclear power stations provided that they are subject to the normal planning process for major projects (under a new National Planning Statement), and also provided that they receive no public subsidy.’

So declares the Coalition Agreement. However, as the Guardian reports, the finance bill due to be debated this coming week introduces a form of subsidy, and it’s attracted opposition among the party:

A large group of Lib Dems are concerned about clause 78 of the bill, which MPs will consider on Monday or Tuesday, that asks them to support a carbon floor price. This mechanism penalises fossil fuels but not low-carbon energy sources, such as nuclear and renewables, and the MPs believe it hands a large financial windfall to nuclear power – effectively a subsidy.

The government has admitted that because of the size of the nuclear industry, it stands to gain up to twice as much as renewables from the proposed carbon floor price. In a written reply, the Treasury economic secretary, Justine Greening, said: “The existing nuclear sector is likely to benefit by an average of £50m per annum to 2030 due to higher wholesale electricity prices. Similarly, the renewable energy sector is expected to benefit by an average of at least £25m a year to 2030.”

Of course it should be remembered that the proposed carbon floor price was also part of the Coalition Agreement:

We will introduce a floor price for carbon, and make efforts to persuade the EU to move towards full auctioning of ETS permits

However, as Lib Dem Federal Policy Committee members Louise Bloom, David Boyle, Gareth Epps and Manchester Withington MP John Leech note in a strongly worded letter also in the Guardian:

We were proud that our party democratically decided at our conference in September 2010 to “ensure that any changes to the carbon price do not result in windfall benefits to the operators of existing nuclear power stations”. We are therefore dismayed that the finance bill will result in a windfall of £50m per year from 2013 to 2030 to existing nuclear operators for doing nothing different – pushing up consumer electricity bills.

Support for a Conservative party-inspired policy on nuclear power must not become another tuition fee debacle for our party. We need to make a stand and ensure that the nuclear industry does not benefit from being an unintended beneficiary of tackling carbon emissions.

Two other members of the Federal Policy Committee, Tim Farron and Danny Alexander, are also, according to the Guardian, in active discussions on the issue:

… the president of the Liberal Democrats, Tim Farron, is so concerned about the legislation he has asked Danny Alexander, the chief secretary to the Treasury, to withdraw the clause. However, it is thought the bill is too complicated to allow for one element to be unpicked. Instead Lib Dems would like to propose a “windfall tax” to claw back some of the financial gains they think the nuclear industry stands to make.

When last Lib Dem Voice asked party members’ about their attitude to nuclear power, there was clear majority support for nuclear as part of the UK’s energy mix — though for many that consent was conditional on there being no public subsidy.

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26 Comments

  • Andrew Waller 2nd Jul '11 - 4:50pm

    This should be used as an opportunity to demonstrate our difference within a coaltion to disagree with the Conservatives on what is a key Lib Dem policy. Had there been the same scale of investment in renewable power over the last 40 years as there had been on civil nuclear power stations then we would be in a far better position for having non-nuclear alternatives to fossil fuel energy generation.
    So our MPs should stand their ground – those of us who lost our seats in May are watching.

  • David Evans 2nd Jul '11 - 6:12pm

    Nuclear energy as a low carbon solution? Do have the courage to sell it for what it is “No carbon, but no solution to disposal of very dangerous waste”, rather than use spurious terminology to pretend we are being irrational. Then you may get a real debate rather than simply contibute to a diatribe.

  • cynicalHighlander 2nd Jul '11 - 8:41pm

    SECURE ENERGY?
    gCO2/kWh
    Coal 755
    Natural Gas 385
    Biomass 29 – 62
    Wind 11 – 37
    Nuclear (OECD) 11 – 22
    Nuclear (Storm and Smith) 84 – 122
    Nuclear (ISA, Uni. of Syndey) 10 – 130
    Nuclear (Extrern-E UK)* 11.5

    Government believe that if EDF says something it must be bone fide, corruption at its sleaziest.

  • Only time will tell if the Lib Dems make a difference on this; I rather suspect the answer will be not.

  • Its simply dishonest to prevent nuclear power generators from benefiting from an increased carbon price. It’s the type of manipulative and devious behavior I despise from governments. The market in Carbon is about carbon dioxide emissions and should remain about carbon dioxide emissions. It shouldn’t be about eco-loons with an axe to grind.

    If there’s evidence the Nuclear industry isn’t paying it’s way then why not raise a tax on the amount of waste nuclear material produced? The cost of clear up and the storage of nuclear waste for a few millennia is the only area where I could believe the nuclear industry isn’t paying its way (although I’ve heard it does).

  • Will refusing to permit a public subsidy on nuclear win the Lib Dems back some of the votes they have lost?

    That should be the only calculation you make when it comes to policy these days if you want to survive. It’s no good deferring to principle on nuclear when the benefits system is being catastrophically mismanaged, higher education destroyed and immigrant bashing becoming a handy smokescreen for economic policy failures.

    You won’t be remembered for what you did to the nuclear industry, you’ll be remembered on the effect your actions in government had on the average voter.

  • So a stand is going to be taken on a £50m a year “windfall” for the nuclear industry from higher electricity prices (not a direct public subsidy). Resulting from a policy that the party has already agreed to.

    So what’s that? Less than a pound per person, compared with current expenditure of £1000 a year per household (and that’s only the domestic component).

    This has an air of being completely detached from everyday reality.

  • Malcolm Todd 3rd Jul '11 - 11:19am

    Clearly, nuclear power is a low-carbon energy source (even the most pessimistic of cynicalHighlander’s figures show it as vastly better than coal or gas), so it makes sense that it benefits from carbon pricing.
    The problem with nuclear power is the extremely long-term health dangers and security problems that it presents. If it’s possible to find a way of realistically pricing these, then that should be done and a specific tax imposed to deal with it. Alternatively, if you take the view that the dangers can’t realistically be contained and aren’t worth the benefits it brings (and I’m agnostic on this) then just ban it. But fiddling around with carbon taxes to exclude nuclear power is the wrong approach.

  • I would like to see the Lib Dems reconsider their attitude to nuclear power. It’s bad, but it’s currently less bad (in my opinion; I am well aware that there is an argument to be had) than the fossil fuels which make up the bulk of the country’s energy source. Disposal of nuclear waste is difficult, but still more tractable than disposal of CO2 given the immaturity of CCS technology.

  • What Malcolm said

  • Cheltenham Robin 3rd Jul '11 - 8:56pm

    I have never been in favour of our anti nuclear stance, it has to be part of the strategy for keeping the lights on. I also believe that our policy does not accurately reflect the views of our members, an unfortunate consequence of having self selecting conference delegates.

  • Old Codger Chris 3rd Jul '11 - 11:25pm

    I used to be firmly anti-nuclear but now I’m not so sure. The safety record of nuclear power in the western world is actually pretty good (although the industry’s botched cover-ups haven’t helped its cause).

    Of course there should be much more emphasis on cutting energy use. But even so, without nuclear power will renewables really deliver all the energy we need? Or will we have to continue relying on energy which is dirty,or imported from dodgy countries, or both?

  • Agree with Malcolm Todd. I would go further, and I am surprised the F word hasn’t made an appearance. What Fukushima definitively shows is the inherent and widespread dangers that nuclear power poses. We live in a very uncertain world, and people are already talking about difficult climate change mitigation, because of increasingly extreme weather events. Weather events would be equally capable of overwhelming our nuclear stations and leading to meltdown or dangerous leaks.

    If humanity is in a struggle against environmental threats, which we already are, surely it makes sense to have a menu of power cutbacks, energy conservation, together with more local renewables backed by large scale solar and water and geothermal power (no doubt with the occasional windfarm!!) Local generation would have the merit that it wouldn’t all go down together under extreme conditions. A technology which is centralised and extraordinarily dangerous outside carefully controlled environments is surely one not fit for purpose in these times?

    All this, of course, irrespective of long term low level health risks, difficulty with decommissioning, long term waste storage, uncertain economics, delays and cost overruns in building etc. Altogether a bit of a sorry story, and I am more than surprised that quite a few Lib Dems seem to have chosen this moment to turn away from our traditional Liberal policy of opposition to nuclear.

  • Anthony Binder 4th Jul '11 - 6:26am

    Extraction, refinement, pelletization, encapsuling and transportation of Uranium is one of the most green house gas intense production we actually have around at the moment, bear in mind that beside being largely Co2 driven, the processes involves substances that are way way more green house gas intense than our old friend the Co2.

    No, nuclear energy production is way underestimated when we talk about green house gases.

  • Can those using Fukushima as an illustration of the general dangers of nuclear power explain how the tsunamis and earthquakes in that case apply to the UK?

  • There really are no rational reasons for opposing nuclear. Rationally speaking. Tim13’s post above is a case in point: it relies upon fearmongering about Fukushima- an obsolete model of power plant that was built on a fault line on the coast of Japan and hit with a tsunami. If the anti-nuclear brigade are going to have to resort to such silly emotive scare tactics one has to assume that they have no rational objections. Nuclear will be necessary as part of a low carbon stratergy in the future.

  • Funny thing

    The potential profits from Nuclear are Privatized – EDF
    The long term disposal costs and risks to health are socialised.
    Private profits / public costs

    Rather like the banks !

  • Rob – I am sure those people living anywhere near Fukushima, or places across a fairly wide area of Ukraine and Belarus following Chernobyl (many people still affected – ask sheep farmers in North Wales) would not regard concerns about nuclear as irrational!

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