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CHINA
- the sale of EDF's controlling stake in Hinkley Point C before the completion of construction. It was further announced that the Government would take a 'special share' in all future nuclear new-build projects, giving the Government the ability to intervene in any proposed sale of more than 15% of shares in a project to another party on grounds of national security.
- At the time of writing, the Government does not yet hold a special share in the Bradwell B or Sizewell C projects, on the basis that they are pending ONR approval, and so there has not been a formal stakeholder decision to proceed with the projects. NSS informed the Committee that it "would not expect to seek or secure a special share in advance of … those decisions".[1]
- While a special share may provide some greater powers for the Government, it would not apply retrospectively; in other words, if the sale of shares in a nuclear project from, say, a French company to a Chinese company was allowed by the Government in 2022 (following assessment that the transaction did not pose a national security threat), the 'special share' would not give the Government any means to intervene in 2032 if the assessment of the national security implications had changed by that point.[2]
- It is of note that the Treasury, under the (then) Chancellor, George Osborne, twice rejected the need for the Government to take a special share in Hinkley Point C. In 2016, the Rt Hon. Sir Ed Davey MP (who, as Secretary of State for Energy and Climate Change, had granted original planning permission for Hinkley Point C in 2013, prior to Chinese involvement) suggested that Mr Osborne had vetoed the idea of a special share because he was "so keen to send positive signals to the Chinese that he was prepared not to go the extra mile for national security".[3]
- For his part, Mr Osborne stated that he had been advised by security experts and civil servants that a special share "would not add more protection" because the nuclear industry was already so highly regulated.[4] This accords with advice in a paper circulated by the Department for Energy and Climate Change (the predecessor to BEIS) in 2015, which stated that "a special share provides only limited protection in that it could only stop a proposed transfer of shares to an entity that was considered to be a security risk at the point of sale … [and] the UK operational regulatory framework is set up to protect against dangerous operations".[5]
- In evidence to this Inquiry, the DNSA noted that:
there are limitations to special shares. I think it is fair to say that they provide limited assurance in particular circumstances. Regardless of how they are drafted, they are a kind of one-point-in-time instrument and do not reflect the evolving threat of the future.
- ↑ Written evidence—Cabinet Office, 22 October 2019.
- ↑ 'National security assessment of scenarios of Chinese majority and minority ownership in Hinkley', Department for Energy and Climate Change, July 2015.
- ↑ 'Hinkley Point: George Osborne says new deal is unchanged', BBC News, 16 September 2016.
- ↑ 'Hinkley Point: George Osborne says new deal is unchanged', BBC News, 16 September 2016.
- ↑ 'National security assessment of scenarios of Chinese majority and minority ownership in Hinkley', Department for Energy and Climate Change, July 2015.
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