While Philip Hammond was busy offering a few marginal measures for green energy he is busy planning to give nuclear power a massive multibillion state funded boost. Clothed in talk of a new means financing infrastructure projects is a silkily wrapped poison pill involving a massive public handout to nuclear power. Heralded as a key accompaniment to today’s Spring Budget statement there is a misleading message that the Government is to adopt so-called ‘Regulated Asset Base’ (RAB) financing of nuclear power projects. This is said to be a successor vehicle to the much-abused PFI system. But if deployed to aid nuclear power the result, is likely to be much much worse than any horrors that have come from even PFI. In fact the notion of RAB financing is being grotesquely distorted to hide the fact that this is a cover for the Government risking very large sums of money to be lent to nuclear power developers. Put simply, if the nuclear power projects are as expensive as they usually are the electricity consumer will lose an awful lot of money and prices will be jerked upwards. Either that or the taxpayer takes a hit and funding of public services suffer big time. You can see the cover up reproduced in the impression given by the Government to the Financial Times today where, we are told that ‘For new nuclear power stations, for example, the government is keen on the use of “RAB” (regulated asset base) financing of the sort used to build the Thames Tideway tunnel’ Under such schemes the developers are allowed to charge consumers in advance for the capital building projects. What Ministers are not emphasising of course, is that in industries such as water the Government does not lend lots of money to the privatised companies. They raise this on private markets. But in the case of nuclear power plants the bulk of the money needed to build them will be borrowed from the Government.
Dave Toke’s Blog 13th March 2019 read more »