Horwood: coalition deal on nuclear power creates possible “win-win situation” for Lib Dems

by Stephen Tall on June 11, 2010

Part of the coalition deal between the Lib Dems and Conservatives allowed for Nick Clegg and colleagues to abstain on three key issues which divide the parties – raising student tuition fees, the Tories’ marriage tax allowance, and nuclear power.

However, written into the agreement, too, was the pledge that no new nuclear power station will receive a public subsidy – which, as Mark Pack has previously noted, means that if the figures don’t stack up, they won’t happen.

It’s a point Cheltenham Lib Dem MP Martin Horwood re-inforces today in an article on politics.co.uk, Lib Dem hopes for ‘win-win’ nuclear solution:

[He] suggested his party’s decision to abstain on a nuclear vote in the Commons, allowing the Conservatives’ support for new power stations to go ahead without undermining the coalition government’s unity, could prove academic.

“If you look at the economics of nuclear power and the commitment the coalition has made not to subsidise it, and then you reflect on the fact not a single nuclear power station has been built anywhere in the world without public subsidy, maybe, just maybe the issue won’t arise,” he said.

“I just hope we will hold rigorously to that line about ruling out any public subsidies to nuclear power. That might leave us in a win-win situation.”

Mr Horwood suggested it was “not that bitter a pill to swallow” because a clear majority of the Commons – both Labour and the Conservatives – backed nuclear power.

Under the terms of the coalition agreement the Lib Dems will abstain when the government brings forward a national planning statement outlining plans for a new nuclear power station.

As ever, though, the devil will be in the detail – in particular what counts as public subsidy. The Nuclear Industry Association claims new nuclear build will be entirely privately funded, and reckons one new power station can be constructed every 18 to 24 months. But:

Green groups argue the need for indirect public subsidies blurs the line as to what does and what does not represent government assistance, however.

The nuclear industry does not pay for insurance, for example, meaning the taxpayer would have to foot the bill in the event of a major disaster.

And under a recent consultation document EDF would only have to pay around a fifth of the eventual cost for dealing with waste, leaving the government and the taxpayer facing the liability after the power station shuts down.

This will be an important debate – and it won’t only be Lib Dems watching it closely. A certain Zac Goldsmith, Tory MP in Richmond, adopts a Lib Dem line on new nuclear power – as LDV has previously noted.