I have had discussions with Cabinet and other colleagues in government on energy policy including new nuclear build. We take the recent unprecedented events in Japan extremely seriously and I am having continuing discussions on the subject of new nuclear power stations in the light of the ongoing situation.
Given that analysis released by Redpoint Energy shows that yesterday’s carbon price floor announcement will lead to a windfall profit for existing nuclear stations of £1.33 billion—let alone what it will mean for new stations—how does that sit with Ministers’ repeated pronouncements that there will be no public subsidy for nuclear?
The carbon price floor is designed to encourage low-carbon sources of energy and it is not in any way designed to attract particular support for one low-carbon source or another. One could equally argue that it is benefiting renewables. That is why it will lead to the switching effect that we find desirable, so that we rely more on low carbon than on high carbon. In addition, the hon. Gentleman will note that the Treasury is considering the impact on existing operators and will keep that under review.
This week, the former UK chief scientific adviser Sir David King has said that the real lesson from Japan was that
“nuclear power is even safer than we thought…by far the safest method of power generation”.
Will the Secretary of State be mindful of that advice and does he agree with that assessment?
I am mindful of it. That is an interesting argument which has been made in many quarters. It is absolutely crucial, comparing the debate in this country with those in other countries such as Germany, that we should base it on the facts and the evidence. That is precisely why I asked Dr Mike Weightman to produce a report—so that we can have a sensible and measured debate based on the facts and the evidence.
Could the Secretary of State say a little more about the assessment he has made of the potential rise in costs of the fleet of new nuclear following the Fukushima disaster? Will he comment in particular on the likelihood that the Japan accident will make it more difficult for private investors to raise capital to build the eight new reactors that are planned by the Government?
On the first point, it is too early to answer the hon. Lady until we have had the report from Dr Weightman and we can understand whether we need improvements in our regulatory regime and whether there are lessons to be learned. There are substantial differences between the Japanese situation and ours but I am determined that we should learn any lessons we can. On the second point, although I spent many years in financial markets I do not claim to know how they will react to particular events as they can often react in a rather faddish and fashionable manner. I think we will just have to wait and see.