John Harris

Journalist & Author

Hinkley Point nuclear power station: a new type of nationalisation

A third of British infrastructure now is in the hands of foreign companies, often largely state-owned. Is nationalisation OK as long as someone else is doing it?

Rejoice! Britain’s first new nuclear power station in a generation is to be built at Hinkley Point in Somerset, and David Cameron could not be happier. “This is a very big day for our country,” he said yesterday, “the first time we’ve built a new nuclear power station for a very long time.”

There is only one snag: “we” are not building it at all. Thanks to an amazingly cushy 35-year deal agreed with the government, the plant to be known as Hinkley C is the responsibility of a consortium largely split between the French energy giant EDF and two Chinese setups, the China General Nuclear Power Group and the China National Nuclear Corporation. EDF is 85% owned by the French government; the Chinese state owns all of the latter two companies. Nationalisation, it seems, is back – only it’s a new kind, whereby it is overseas governments who get to buy up our national assets.

Just look at the evidence. At the last official count, a third of British infrastructure was overseas-owned – but what’s particularly interesting is the amount of government money involved. EDF – it stands for Électricité de France – already owns two British coal-fired power stations, eight UK nuclear plants and a couple of British wind farms. Germany’s Deutsche Bahn is a 100% state-owned railway company, and since 2010, it has also owned Arriva, which controls an array of British bus services as well as the majority of trains that run in Wales, and a whole load that serve Birmingham (prior to buying Arriva, DB had already bought the Chiltern main line, overground services in London and Tyne and Wear Metro).

DP World owns 60 or so ports across the planet, including the Port of London and the Port of Southampton – and is controlled by Dubai World, an investment company that acts on behalf of Dubai’s government. The state-backed China Investment Corporation owns nearly 10% of Thames Water and a similar-sized chunk of Ferrovial, the Spanish-owned conglomerate that has a big stake in the airports at Heathrow, Southampton, Glasgow and Aberdeen. Those airports are also 20% owned by Qatar Holding, which slings money around on behalf of Qatar’s rulers. Oh, and just to bring things up to date, among the big investors that bought thousands of shares in Royal Mail were sovereign wealth funds whose money comes from the governments of Kuwait and Singapore.

The Hinkley Point deal is traceable to a memorandum of understanding on infrastructure investment, agreed by the governments of China and the UK in 2011, and boosted by George Osborne’s recent trip to Beijing (where he announced that another state-owned Chinese company is to get involved in Manchester airport). There will, it seems, be much more of this stuff – not least, perhaps, when it comes to the new high-speed rail line that will run between London and Birmingham and beyond. Among the firms who are interested in a piece of that particular action are the state-owned China Railway Group, though while in China, Osborne said talks about all that were “for another day”.

Strange, perhaps, that the same Tories who warn of the perils of government intervention in the economy and our supposed loss of sovereignty to the wicked old EU should be going down this road, but there we are: state ownership is obviously fine, so long as it’s someone else’s state that’s doing it.

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