Skip to main content

EDF (Strike Price Negotiations)

Volume 557: debated on Thursday 31 January 2013

Order. I am grateful to the Minister, but we are actually discussing strike price negotiations with EDF, which is a somewhat different matter.

I was racing ahead of myself for a moment, Mr. Speaker.

Discussions are ongoing, with the aim of finding a fair, affordable, value-for-money deal. No commitment has been made on commercial terms or the strike price.

Another interpretation of those ongoing discussions is that they are offering a consumer subsidy to the French state nationalised energy company Électricité de France in a mature market, without much competition, and in advance of the relevant legislation. Should that not be subject to proper parliamentary scrutiny?

As I have already said, the strike price that we agree and the process that leads up to that agreement will indeed be subject to such scrutiny, because we will be transparent about the arrangements that we make. Let me be perfectly candid. If this deal does not stack up, we will not proceed with it. It must be in the interests of taxpayers and it must be fair, although of course it must be commercially attractive as well. The negotiations are going ahead, and it would be inappropriate for me to say more about them, but I will say that this can be a win-win for our future.

The Minister is right to say that the deal must be in our interests, but that cannot be known until after the fact of the agreement on the strike price. The key problem with the strike price is a perverse incentive to overestimate the construction costs on which it will be based. If it is subsequently found that those costs are lower than the estimate, the consumer will be paying more for the strike price that the Department has agreed. Why did the Minister and his colleagues on the Government Benches vote against our amendments to the Energy Bill, which would have made transparency essential to the entire process?

Because we have said that we will publish an investment contract concerning details of the strike price. The hon. Gentleman, who is an experienced Member of Parliament, knows that the process of negotiation itself is bound to deal with commercial matters that are sensitive, and is bound to deal with trade secrets which, as he acknowledged in the Bill Committee, cannot be published. He also knows that it might be subject to all kinds of other matters that it would be inappropriate to debate now. However, we are clear about this: we will be transparent, and we will be straightforward.

Order. These are very important matters, but there are other important matters that we need to reach.