Hammond: reviewing Hinkley Point C decision ‘would damage UK credibility’

The Hinkley Point C is not an economically attractive project for its investors, chancellor Philip Hammond suggested. In evidence to the Lords Economic Affairs Committee on Tuesday he said the deal had clearly been agreed, by French and Chinese nuclear utilities EDF and CGN, “for strategic business reasons rather than transactional reasons. They are not motivated primarily by the economics of the individual projects,” he said. He insisted there was a ‘pipeline’ of UK nuclear projects, naming sites at Wylfa, Moorside, Sizewell C and Bradwell.

He admitted that if the Hinkley Point C deal had not been with companies backed by the French and Chinese governments, Whitehall would have taken a different approach to assessing them. “If they were private sector companies we would have to take a much more detailed look at what the equation looked like from their side,” he said.

He maintained that the deal was still a “well designed transfer of risk”, as he described it last year. “Costs are not rising for the [UK] government or the bill payer”, he said, although they may be rising for EDF.  That was like taking rent from a tenant without looking at whether they could carry on paying, he was told.

He declined to follow the advice of the National Audit Office to review the deal. He said that would damage the UK’s investment credibility: “I don’t think that the idea of reviewing projects that have a 60-year lifesan and 15-year development cycles once in a [five-year] parliament is credible”, he said.