The Government failed to protect energy consumers when agreeing a deal to build the Hinkley Point nuclear reactor, leaving taxpayers to make up a £30bn funding shortfall.
Along with rising energy bills, the public cost will “hit the poorest the hardest”, according to the cross-party Public Accounts Committee, which has published a report on the Hinkley deal.
The committee chair, Meg Hillier, said the “blinkered determination to agree the deal” shown by successive governments “means that for years to come energy consumers will face costs running to many times the original estimate”.
The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
SUBSCRIBE & SAVE
Sign up for The Week's Free Newsletters
Join more than 350,000 subscribers and keep yourself informed with a selection of The Week’s most interesting, enlightening and entertaining stories - plus daily puzzles.
Join more than 350,000 subscribers and keep yourself informed with a selection of The Week’s most interesting, enlightening and entertaining stories - plus daily puzzles.
Latest Videos FromThe Week
In 2013, the coalition government agreed to give France’s EDF a minimum price guarantee of £92.5 per megawatt hour for 35 years. This means the Government will have to pay the difference between the wholesale electricity price and the minimum it has promised, a figure the National Audit Office believes could reach £30bn, five times more than originally expected.
“Over the life of the contract, consumers are left footing the bill and the poorest consumers will be hit hardest,” said Hillier. “Yet in all the negotiations no part of Government was really championing the consumer interest.”
The Government is trying to reduce household energy prices, reports Reuters, “but is under pressure from suppliers, who say policy costs are partly responsible for spiralling bills”.
Despite repeated delays and questions over the value of the deal to the British taxpayer, Theresa May gave it the green light last summer.
EDF has also faced questions from its shareholders - and the French Government, which controls a majority stake in the energy company - about the long-term benefits of building the plant, especially after it was forced to secure further investment from Chinese partners.
Further nuclear plants planned in Britain by Japanese and Chinese firms will need support from government, and Wednesday’s report urges ministers to “evaluate the strategic case before agreeing any more deals”.
