MPs' hidden nuclear subsidy claim

16 May 2011 Last updated at 14:04 GMT It's at the centre of coalition energy policy - we will only give the go-ahead to new nuclear power stations if they can be built without public subsidy.

But for some time there have been grave doubts that a new generation of power stations will be built purely through market forces.

A new nuclear power station could be built at Sellafield

And now MPs have accused ministers of disguising subsidies to get round the problem.

In its report, the Energy and Climate Change Select Committee says ministers are at risk of warping the market and disadvantaging competing technologies.

The problem is that any firm building a nuclear power station has huge upfront costs to develop the technology and put safety measures in place.

For that reason, investors want some degree of certainty about the return they'll get.

According to the report, the Government is planning to do that by providing long-term contracts and guaranteed prices.

Deeply irresponsible

The Government can speak for its own policy, but I would certainly support subsidy for new nuclear generation in this country.”

End Quote Jamie Reed MP Shadow Environment Minister

The Committee argues that's a subsidy in all but name, and has said that ministers should be upfront about it.

The MPs also say they should offer a level playing field to wind farm and solar power developers.

Tim Yeo, who chairs the committee, said: "Ministers believe that new nuclear could play a key role in keeping the lights on and meeting our climate change targets - but they don't want to own up to supporting it.

"This is understandable given the promise they made not to subsidise nuclear, but it would be deeply irresponsible to skew the whole process of electricity market reform simply to save face."

He also warns that the system being set up is so complex it may not deliver the investment in new energy sources we desperately need.

The report has been seized upon by environmentalists who say it is proof that the Government is giving nuclear power an unfair advantage, and that its promise not to subsidise it is completely bogus.

That's a charge the Government denies.

Labour MP Jamie Reed favours subsidising nuclear power.

Subsidy essential

But one Labour MP and shadow minister has told the Politics Show that new nuclear power stations will not be built without public subsidy.

Jamie Reed represents Copeland in Cumbria. It's a constituency which includes Sellafield, and that's where he worked before entering parliament.

The MP and shadow environment minister says he has always believed that public subsidy should be used to develop nuclear power stations and other forms of energy generation.

He wants to see three nuclear power plants built in his constituency alone, and believes subsidy will be needed to attract investors.

He says: "I have always been consistent in believing that any form of energy production will need subsidy.

"The Government can speak for its own policy, but I would certainly support subsidy for new nuclear generation in this country."

But all of this is a problem for the coalition.

While the Conservatives are keen on nuclear power, the Lib Dems and their Energy and Climate Change Secretary Chris Huhne are not.

Many Lib Dems will be unhappy with any change of policy that would allow public money to go towards developing new power stations.

The select committee though is concerned that the muddle over whether to subsidise or not could prevent vital investment in our power supply.

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